By: H.E. Dr Sultan Al Jaber, ADNOC Group CEO
Energy companies must navigate a complex and unpredictable world, yet there are major growth opportunities for those nimble and agile enough to capitalise on them. Global energy demand, which no single source can satisfy, will expand at least 25 per cent by 2040, driven by the fast-growth economies of China, India and South-East Asia. So, while renewables will take up an increasing share of the energy pie, the pie itself is growing, ensuring that the market for oil and gas will remain robust for many decades to come. Most importantly, hydrocarbons are the indispensable building block of the fastest growing segment of the energy value chain -polymers and plastics- which are forecast to grow 150 per cent by 2040.
The realities of the evolving energy landscape require companies to adjust their business models in order to remain resilient in the face of price fluctuations and well positioned to seize the opportunity of future growth trends. Recognising these dynamics, ADNOC is implementing a comprehensive approach in line with our 2030 strategy of a more profitable upstream, more valuable downstream, more sustainable, economic gas supply and more proactive, adaptive marketing.
We are optimising operational efficiency, reducing unit costs per barrel and enhancing profitability. We recently completed the restructuring of our ADMA offshore concession, splitting it into three areas to maximise the value of our resources and introduce strategic partners from key geographies who can ease access to growth markets.
We have revised our financial structure to unlock value, accelerate our growth and boost performance. Last year’s successful IPO of ADNOC Distribution is one example of the commercial focus we are applying to every part of our business as we seek a smarter use of capital and assets. Having set in place a solid framework for success, we are now initiating a major expansion of our downstream operations to take full advantage of the attractive growth in higher value petrochemical products.
While ADNOC’s upstream will always remain a core component of our business, we intend to become a major global downstream player, through an unprecedented domestic investment programme that will double our crude refining capacity and triple our petrochemical production by 2025. This will be supported by select, international investments aimed at securing market access and adding greater value. Lying at the heart of this ambitious strategy is the Ruwais Industrial hub, which we intend to develop into the largest integrated refining and chemical site in the world by leveraging its distinct cost and quality advantages, including abundant high grade feedstock, on site best-in-class integrated infrastructure and our pivotal location at the crossroads between East and West.
ADNOC’s success owes a great deal to the legacy of partnership that has defined Abu Dhabi and the UAE’s relationship to the world. On May 13 and 14, ADNOC will invoke that legacy again, when we host the ADNOC Downstream Investment Forum. At this Forum we will unveil our downstream roadmap and signature projects suitable for existing and new partners, willing to join ADNOC to invest locally in order to grow together globally