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Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Group CEO of the Abu Dhabi National Oil Company, ADNOC, today shared insights on energy market dynamics, the energy transition, and ADNOC’s future strategy during a virtual session of the Energy Intelligence Forum.
Speaking with Alex Schindelar, President of Energy Intelligence, during a leadership dialogue, Dr. Al Jaber said, "When it comes to managing the economic impact of COVID-19, it really comes down to the fact that we are realising the benefits of the transformation we started four years ago. Over this period we have focused on improving our performance and strengthening our agility while always reinforcing efficiency throughout our business. Most importantly we have focused on what we can control and that is our costs.
"Going forward, we will continue to focus on developing our upstream resources and expanding our downstream footprint here in the UAE, while maximising value through creative partnerships. In addition, we are further strengthening our marketing and trading capabilities. Last month we completed our first derivatives trade, marking the beginning of a new era for ADNOC as an active trader."
Commenting on how ADNOC and Abu Dhabi have continued to attract investment in 2020 following ADNOC’s multi-billion dollar deals, Dr. Al Jaber said the deals were as a result of the fact that the UAE has created a safe, reliable, and stable business environment, underpinned by a unique partnership model. He noted this business environment is very attractive to the global investment community who view the UAE as a highly trusted, go-to investment destination.
Dr. Al Jaber added that "these transactions have highlighted the world-class nature of Abu Dhabi’s and ADNOC’s energy assets and infrastructure base, together with their low-risk and high return profile."
Responding to a question on ADNOC’s strategy behind monetising assets, Dr. Al Jaber said, "ADNOC’s strategy is very much focused on unlocking value and driving growth through smart, creative partnerships." He stressed ADNOC "will continue to leave no stone unturned to maximize value from across our portfolio".
Dr. Sultan noted that while no one is in a position to predict what the shape of economic recovery will look like over the next few months given that there are multiple variables at play, the long-term structural market for oil and gas is very robust, with demand expected to increase to 109 million barrels per day over the next 25 years, in line with global economic growth.
He went on to highlight the role of the Organisation of the Petroleum Exporting Countries, OPEC, in balancing oil markets since the markets reached its low point in March while stressing the UAE is complying with its production quota agreed with OPEC plus.
"I must commend our partners in OPEC plus for their collective efforts to balance supply and demand during this critical period. As part of this effort, the UAE continues to adhere closely to all agreed cuts. In fact, we achieved well over 100 percent compliance this past month and these measures are having a positive impact on market confidence," Dr. Al Jaber said.
Speaking on ADNOC and the UAE’s approach to COVID-19, Dr. Al Jaber explained how the country’s robust response has focused on a safety-first approach to "test early, test often and test again and again".
"The UAE has carried out over 10 million tests so far – that’s more than one test for every citizen and resident of our country. This great public health effort makes the UAE the first country in the world where the number of COVID-19 tests exceeds the population and it is a testament to the careful and prudent guidance of our wise leadership," Dr. Al Jaber said.
ADNOC has followed this example closely and the company’s strong health, safety, and environment (HSE) culture has been instrumental in handling the pandemic from a health perspective, Dr. Al Jaber said. He explained that ADNOC has successfully managed the economic impact of COVID-19 as a result of its transformation which was started four years ago and this has enabled the company to maintain uninterrupted operations throughout this period and deliver on its strategic objectives.
Dr. Al Jaber also shared his perspective on the energy transition and outlined how ADNOC is preparing for the future energy landscape. He emphasised that in 2030, oil and gas will remain at the heart of ADNOC’s business model because even in the most fast-paced transition scenario, hydrocarbons will still provide over half the world’s energy needs.
He went on to explain that ADNOC will continue to play a vital role in supporting an integrated energy mix and will explore expanding into clean energy and emerging technologies.
"Our role in this future will be to produce the world’s most cost-efficient and carbon-efficient barrels. This combination of cost efficiency and carbon efficiency gives us a distinct competitive advantage, particularly as investment in exploration in other regions comes under pressure," Dr. Al Jaber said.
He explained that this reality underscores ADNOC’s commitment to expanding its crude oil production capacity to 5 million barrels per day by 2030 while driving gas self-sufficiency for the UAE.
"Given that reality, it makes perfect sense that these barrels come from the most cost-efficient and carbon-efficient producers. Our barrels are among the most carbon-efficient in the world, and we are also unlocking vast reserves of natural gas, as an effective transitional fuel with reduced environmental impact," Dr. Al Jaber said.
The Energy Intelligence Forum formerly known as the Oil and Money Conference is bringing together virtually policymakers, senior executives, and experts from the international energy industry to dialogue on the key trends and opportunities facing the industry from October 13th – 15th.
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