Mohamed bin Zayed Chairs ADNOC Board of Directors Meeting at Expo 2020 Dubai

Source: 12/1/2021, Location: Middle East

His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Chairman of the Board of Directors of the Abu Dhabi National Oil Company (ADNOC), today presided over the annual meeting of the ADNOC Board of Directors.

During the meeting, which was held in the UAE pavilion at Expo 2020 Dubai, H.H. Sheikh Mohamed bin Zayed conveyed the support and encouragement of the UAE President His Highness Sheikh Khalifa bin Zayed Al Nahyan for ADNOC and commended the companyís proactive steps to embrace the energy transition noting its clean energy partnership with Emirates Water and Electricity Company (EWEC). His Highness lauded ADNOCís strong performance and its landmark achievements in 2021 that have maximized value and growth opportunities for the UAE.

H.H. Sheikh Mohamed bin Zayed underlined ADNOCís important role as a catalyst for the UAEís growth and diversification and expressed confidence that the company is well placed to continue to empower the nationís socioeconomic ambitions as it looks ahead to the next 50 years.

ADNOC is building on this success and today announced a significant increase in national reserves of 4 billion stock tank barrels (STB) of oil and 16 trillion standard cubic feet (TSCF) of natural gas. These additional reserves increase the UAEís hydrocarbon reserves base to 111 billion STB of oil and 289 TSCF of natural gas, reinforcing the countryís position in global rankings as the holder of the sixth-largest oil reserves and the seventh-largest gas reserves.

Commenting on the achievements, H.H. Sheikh Mohamed bin Zayed congratulated ADNOC and said the UAE will continue to responsibly unlock its hydrocarbon resources to drive progress and contribute to global energy security.

As ADNOC unlocks the UAEís lower carbon oil and gas resources, it is ensuring greater economic value is retained in the local economy through its successful In-Country Value (ICV) program which is nurturing new business opportunities for the private sector and creating jobs opportunities for UAE Nationals.

H.H. Sheikh Mohamed bin Zayed and the board reviewed the ongoing achievements of ADNOCís ICV program. Since ADNOC launched the program in January 2018, it has driven AED105 billion ($28.6 billion) back into the UAE economy and created over 3,000 jobs for UAE Nationals in the private sector, including over 1,000 jobs this year.

The Board of Directors approved ADNOCís five year business plan and capital expenditure (CAPEX) of AED 466 billion ($127 billion) for 2022-2026 to enable its plans to expand its upstream production capacity and downstream portfolio as well as its low carbon fuels business and clean energy ambitions. As part of this plan, ADNOC aims to drive over AED160 billion ($43.6 billion) back into the UAE economy across 2022-2026 through its ICV program. This will further stimulate growth and diversification and support the objectives of the UAE Principles of the 50 outlined by the wise leadership to usher a new era of economic and social growth over the next 50 years.

The board also approved ADNOCís New Energies Strategy aimed at further reducing its carbon footprint and enabling it to capitalize on opportunities in renewable energy, hydrogen and other lower carbon fuels. The board noted that ADNOCís clean energy partnership with EWEC will see up to 100% of ADNOCís grid power supplied by EWECís nuclear and solar clean energy sources, and concluded it is an important milestone in ADNOCís journey to a lower-carbon future.

In Downstream and Industry, the board endorsed ADNOCís plans to evaluate doubling its liquefied natural gas (LNG) production capacity from 6 to 12 million tons per annum (MMTPA). The potential expansion of ADNOCís LNG production capacity is underpinned by the growth in its natural gas position, with new developments planned to add 3 billion standard cubic feet per day (scfd) and more to come from associated gas as it expands its crude oil production capacity.

The board highlighted the progress of the TAíZIZ Industrial ecosystem in Ruwais and the strong local and international investor interest received, particularly in the TAíZIZ Industrial Chemicals Zone. The Chemicals Zone, ADNOCís joint venture with Abu Dhabi Developmental Holding Company (ADQ), is a key pillar of ADNOCís downstream and industrial expansion strategy and is helping to accelerate the development of Abu Dhabiís petrochemicals and manufacturing industry. Anchor projects for the world-class chemicals zone are already in the design phase and international partners such as Reliance Industries, Fertiglobe, GS Energy and Mitsui have announced they will partner with TAíZIZ.

Within the TAíZIZ Industrial Chemicals Zone, ADNOC is advancing a world-scale low carbon ammonia facility as part of its ongoing efforts to reinforce Abu Dhabiís leadership in the clean hydrogen economy and capitalize on growing global demand for low-carbon ammonia. The board noted the progress on this front, including ADNOCís recent sales of low carbon ammonia demonstration cargos produced by Fertiglobe at its Fertil plant in Ruwais to customers in Asia.

In trading, the board recognized the significant strides made by ADNOCís trading teams following the establishment of two new trading entities Ė ADNOC Trading (AT) and ADNOC Global Trading (AGT) Ė over a year ago. The board congratulated ADNOC on the establishment of its trading offices in Singapore, which are the latest step in the growth of its trading businesses.

The board discussed recent developments in oil and gas markets and noted that ADNOC continues to remain agile, resilient and able to quickly adapt to market conditions.

The success of the Murban Futures Contract on ICE Futures Abu Dhabi (IFAD) was also highlighted with the new Murban Futures Contract recently trading over one billion barrels of Abu Dhabiís flagship low-carbon Murban crude. The board noted that Murban was now more widely available to a broader set of market participants around the globe and is well positioned to act as an important price marker for crude oil. Other board members that attended the meeting were H.H. Sheikh Hazza bin Zayed Al Nahyan; H.H. Sheikh Mansour bin Zayed Al Nahyan; H.H. Sheikh Khaled bin Mohamed bin Zayed Al Nahyan; H.H Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, H.E. Suhail Mohamed Al Mazrouei; H.E. Dr. Sultan Ahmed Al Jaber; H.E. Ahmed Al Sayegh; H.E. Dr. Ahmed Mubarak Al Mazroui, H.E. Khaldoon Khalifa Al Mubarak; H.E. Jassem Al Zaabi; H.E. Awaidha Murshed Al Marar.

His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, said: ďADNOC is very grateful for the support of His Highness Sheikh Mohamed bin Zayed, the Supreme Council for Economic and Financial Affairs and the ADNOC Board of Directors, as their guidance has been instrumental in enabling our robust operational and financial performance and landmark achievements this year. Our progress is as a result of the wise directives of the UAEís leadership and the hardwork and dedication of all my colleagues at ADNOC.

ďWe have laid a solid foundation to ensure ADNOC continues to drive greater and more sustainable value for the UAE during the energy transition. As we build on this foundation, we are capitalizing on the many commercial opportunities in this era while strengthening our position as one of the lowest cost and lowest carbon oil and gas producers in the world.

ďThe Board of Directorsí approval of ADNOCís Business Plan and New Energies Strategy marks an important phase in our ongoing journey to future-proof our business model. We are confidently moving forward to deliver upstream growth, accelerate the UAEís industrial development through our downstream expansion, build our trading capabilities and advance our position in hydrogen and clean energy. At the same time, we are creating opportunities for the UAEís private sector to benefit from ADNOCís growth and enabling more skilled job opportunities for UAE National talent, in line with the Leadershipís wise directives.Ē

The increase in oil and gas national reserves was driven by ADNOCís continuous appraisal activities and enabled by best reservoir management practices across its onshore and offshore portfolio as well as leveraging advanced tailored technologies. In addition, maturing development plans towards achieving ADNOCís 5 million barrels per day (mmbpd) production capacity target by 2030 contributed to the substantial reserves increase.

Around half of the newly added 4 billion STB oil national reserves are Murban-grade crude, Abu Dhabiís highly sought-after lower-carbon crude grade which has been successfully trading on the ICE Futures Abu Dhabi (IFAD) commodities exchange since March 2021. The new Murban reserves offer the potential to reinforce the long-term liquidity of the Murban Futures Contract. Furthermore, the increase in oil and gas reserves underpins ADNOCís objectives of boosting its crude oil production capacity and driving gas self-sufficiency for the UAE. These objectives will be enabled by the growth of ADNOCís drilling activities, through ADNOC Drilling, as they will require thousands of new wells by 2030.

The latest increase in national reserves follows ADNOCís announcement last year of the discovery of recoverable unconventional oil resources estimated at 22 billion STB and an increase in conventional oil national reserves of 2 billion STB. Also, in 2019, ADNOC announced national reserves increases of 7 billion STB of oil and 58 TSCF of conventional gas and the discovery of unconventional recoverable gas resources totaling 160 TSCF.

This year ADNOC has delivered several other landmark achievements. These include the largest initial public offering (IPO) in the history of Abu Dhabiís stock exchange, ADNOC Drilling, which was more than thirty times oversubscribed; the IPO of the worldís biggest shareholder-owned exporter of fertilizer, Fertiglobe, which was more than twenty times over-subscribed; raising $1.64 billion (AED6 billion) through the combined offering of ADNOC Distribution shares and issuance of exchangeable bonds; the successful conclusion of Abu Dhabiís second exploration block bid round and the signing of a $6.2 billion (AED22 billion) strategic partnership with Borealis to build Borouge 4 in Ruwais.

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