The CEO of oil giant ADNOC spoke to Euronews about plans to increase investment on downstream oil market
The Abu Dhabi National Oil Company (ADNOC) unveiled plans to invest AED 165 billion (US $45 billion) alongside partners, over the next five years, on downstream oil market. The new strategy was unveiled at the ADNOC Downstream Investment Forum, which took place today in Abu Dhabi in the United Arab Emirates.
"At this time now that we shift gear and we start focusing on maximising value and stretching the dollar from every barrel we produce," the company's CEO Dr. Sultan Al Jaber told Euronews' Daleen Hassan.
The downstream oil sector encompasses processes such as oil refinement, petrochemistry, distribution and retail – in other words, the bottom end of the oil supply chain. Oil companies based in the Gulf such as ADNOC are usually known for their focus on the upstream sector (detection, extraction and production of crude oil and natural gas).
As cleaner, cheaper energy alternatives become available, global concerns have shifted from having an eventual low supply of oil to actually having an oversupply. This has led oil prices to drop, creating significant instability in the market.
So ADNOC's bold decision to expand its downstream sector and diversify its activities might come as a safety net, ensuring new ways to strengthen UAE's economy in the long run.
'A logical step'
“We do believe that oil will continue to be essential, it will continue to be a critical factor in helping to grow our economies and it will continue to play its very important role as part of the energy mix. To us, it's simply a natural extension to our investments in oil and gas. We find this to be a logical step. We simply can and we should invest in downstream,” said Dr. Al Jaber.
By increasing its refining and petrochemical operations, the state-owned company aims to undertake highly targeted overseas investment and secure greater market access.
“[ADNOC going downstream means] capitalizing on our deep energy expertise and tapping into strategic partnerships and substantial financial resources as well as having access to technology and knowing where the market is actually going to grow,” he added.
The world's largest oil refinement facility
More specifically, part of this unprecedented investment involves a major expansion of its Ruwais Industrial Complex, creating what would be the world’s largest and most advanced refining and petrochemicals facility. Ruwais' refining capacity will be increased by 65% by 2025, meaning a total capacity of 1.5 million barrels per day. For reference, the current largest refinery, India's Jamnagar, produces 1.2 million barrels per day.
Adding to this, the strategy is expected to add more than 15,000 jobs and contribute an additional 1% to GDP per year.
State-owned ADNOC was established in 1971 and stands today as the world's 12th largest oil producer. It has 16 subsidiaries and 55,000 employers working in the fields of the oil, gas, and petrochemical industry as well as crude oil and gas transport and services.