By: H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO
As we enter the fourth industrial age, the world’s demand for energy and higher value products is increasing at an unprecedented rate, driven by a fast expanding middle class that is set to number 5 billion by 2030.
By 2040 oil consumption is forecast to rise by at least an extra 10 million barrels per day, demand for natural gas will grow by 40 per cent and demand for petrochemicals and polymers will grow most sharply at 60 per cent, with much of the new demand coming from the growth economies of Asia. The goal for our industry is not simply to keep up, but to stay ahead of this demand curve. This is a mission we at ADNOC are calling “Oil and Gas 4.0.”
In practical terms this means fostering a dynamic, performance led, commercially minded corporate culture that applies the latest technology and optimises our resources, including, most critically, our human resources.
For us, the smart use of advanced technologies is the key to unlocking the growth opportunities created by Oil and Gas 4.0 and advancing our industry. At ADNOC, we are embracing artificial intelligence and digitisation to build resilience and drive profitability across our operations. Predictive analytics is helping to reduce our maintenance costs, prevent shutdowns and avoid system failures. Big Data is allowing us to make real-time decisions in response to market movements and stay ahead of the competition.
And blockchain is generating valuable efficiencies, by transforming how we track the transaction of every hydrocarbon molecule we produce, from first oil to final sale.
But while technology will be a critical enabler of our future success we must not lose sight of the fact our people are our most important asset and are crucial to the continued success of our industry. To make the most of the opportunities Oil and Gas 4.0 presents, we will have to attract the best and brightest talent. As ADNOC’s Workforce of the Future survey shows, our industry needs to appeal to the next tech savvy generation of STEM Millennials and Gen Zs.
We will only do this if we position ourselves at the cutting edge of innovation and make our industry a destination of choice and an incubator of the talent we need, to build long term resilience and to thrive.
Since we last gathered in Abu Dhabi, we have set ourselves ambitious goals at ADNOC, goals that will make ADNOC a model, not just for a modern national oil company, but for how a modern energy company should operate in the 4th industrial age. We are leaving no stone unturned, as we unlock and maximise value from all our resources.
By thinking differently, applying advanced technology creatively and adjusting the business model, ADNOC has begun to tap new reserves of oil, which will help us to increase our oil production capacity to 4 million barrels per day by 2020 and 5 million barrels per day by 2030. Meanwhile, in pursuit of our strategic goal to become gas self-sufficient and eventually transition to a net exporter of natural gas, we have introduced the unconventional industry to the UAE and begun opening up vast, previously inaccessible reserves of gas.
At the same time, we are exploiting undeveloped reservoirs, tapping our gas caps and maximising value from our sour-gas resources, reducing the average cost of our available gas resources. In short, we have reframed the business model for sustainable, economic gas production in the UAE. Meanwhile, we continue to leverage ADNOC’s reputation as a reliable and trusted business partner to expand our partnerships and investor base in key strategic areas.
- Opened up our concessions to strategic partners in the key markets of India and China.
- Placed new offshore and onshore concession blocks up for competitive bid.
- Introduced a strategic equity partner into ADNOC Drilling, to create a regional drilling champion with Baker Hughes, a GE company.
- Attracted significant foreign direct investment into a new state of the art refinery in a $5.8 billion deal with OMV and Eni.
- Completed, with BlackRock and KKR, the first ever institutional infrastructure investment into a regional national oil company, unlocking $4 billion in value.
In addition, ADNOC Fitch Ratings (Fitch) has assigned ADNOC Group a standalone credit rating of AA+ citing ADNOC’s ‘high output, significant reserves and strong profitability’ and a Long-Term Issuer Default Rating (IDR) of AA with a Stable Outlook, in line with the sovereign rating of Abu Dhabi.
And, in January ADNOC was named the most valuable brand in the Middle East, by Brand Finance, the world’s leading brand valuation and strategy consultancy.
Within ADNOC, we understand the need to balance a disciplined focus on operational efficiency and enhanced performance, with the imperative to maintain targeted growth investments in exploration, refining, petrochemicals, technology and people.
We also accept that today’s energy landscape requires us to break from old conventions and welcome new paradigms.
ADIPEC 2019 will provide the platform for oil and gas industry leaders and stakeholders to come together to engage on these and other key issues and find the solutions that will allow us to take advantage of the opportunities created by Oil and Gas 4.0.
This article first appeared in ADIPEC News May 2019