The UAE will pump Dh486 billion to ramp up its oil production by Abu Dhabi National Oil Company, which will also help the state-owned oil firm to become self-sufficient, as well as to be a net gas exporter in the coming years.
Adnoc will increase its oil production to four million barrels per day by 2020 and five million bpd by 2030.
The announcement comes on the eve of US sanctions on Iran's vital oil sales to force Tehran into negotiations to scrap its nuclear energy and ballistic missile programmes.
His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and Vice-Chairman of the Supreme Petroleum Council (SPC), presided over the meeting and approved the plan.
The council announced new discoveries of gas in place, totalling 15 trillion standard cubic feet. It also announced new discoveries of one billion barrels of oil in place and approved Adnoc's new five-year business plan and capital investment growth of Dh486 billion between 2019 and 2023.
The gas strategy will sustain LNG production to 2040 and allow Adnoc to seize incremental LNG and gas-to-chemicals growth opportunities.
Sheikh Mohamed reaffirmed the support of the President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, for Adnoc's transformation into a performance-led, more commercially-minded organisation and its focus on creating long-term, sustainable value to enable the UAE's economic ambitions.
He also expressed the SPC's recognition of Adnoc's strong financial and operational performance, its use of creative and strategic partnerships to unlock and drive substantial value across the entire business and its strong commitment to maximising in-country value.
Adnoc's current capacity is three million bpd, which is expected to hike to 3.4 million bpd by year-end, four million bpd by 2020 and five million bpd by 2030.
In May 2018, Adnoc announced a Dh165 billion downstream investment plan to triple its production of petrochemicals to 14.4 million tonnes per annum by 2025.
Dr Sultan bin Ahmad Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO, said the incremental increase in oil production capacity will enable Adnoc to continue to be a reliable and trusted energy supplier that has the flexibility and capacity to respond and capitalise on the forecasted growth in demand for crude.
"At the same time, the substantial investments we will make, in the development of new and undeveloped reservoirs, gas caps and unconventional resources, will ensure we can competitively meet the UAE's growing demand for power generation and industrial use. While responding to domestic demand, we will maintain our international commercial commitments and seize incremental LNG and gas-to-chemicals growth opportunities," he added.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the higher investment to increase output capacity is very positive for the UAE to help meet rising demand, including domestic.
"Gas development is a key priority, in part to help reduce dependence on imports. We have already seen a rise in hydrocarbon project awards in 2018 and we expect this to continue," Malik said.
Manoj Krishnan, head of private wealth at Continental Financial Services, said once the production comes online from 2020 onwards, things would depend on Opec production quotas.
"I doubt Adnoc will have available quota unless demand picks up very strongly over the next 1 year or so. There is already excess capacity globally," Krishnan said.
Dr Al Jaber forecasted that the world oil consumption is increasing by an additional 10 million bpd by 2040 as the global economy is close to consuming 100 million bpd of crude. Over the same period, demand for natural gas will increase by 40 per cent, while the market for higher-value polymers and petrochemicals will grow by 60 per cent.
Under the new gas strategy, Adnoc will develop the Hail, Ghasha and Dalma project that taps into Abu Dhabi's Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable gas. The project is expected to produce more than 1.5 billion cubic feet of gas per day.
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