Saudi Arabia is synonymous with oil, the EU is obsessed with renewable energy, and the U.S. is the world's leading natural gas producer, but there are few countries pursuing all three of these energy sources with as much vigor as the UAE.
While much of the West, encouraged by the International Energy Agency (IEA) aim for net-zero, is shunning fossil fuels, energy demand continues to rise across the globe. Without sufficient renewable energy development to meet this demand, the UAE is acknowledging its position as a world leader in oil and gas, which are still very much still needed to power the world over the next decade and beyond.
Abu Dhabi is further expanding upon its already strong oil industry through the full-field development of its Belbazem offshore block, with heavy investment expected to boost oil output in the coming years.
In May, the National Petroleum Construction Company (NPCC) was awarded a $744 million contract by Al Yasat Petroleum Operations Company, a joint venture between the Abu Dhabi National Oil Company (Adnoc) and the China National Petroleum Corporation (CNPC) to develop Abu Dhabi's Belbazem offshore block. Adnoc holds a 60 percent stake in Al Yasat, while CNPC holds 40 percent.
The contract covers the marginal offshore fields Belbazem, Umm Al Salsal, and Umm Al Dholou. It is expected that offshore facilities in the development will produce 45,000 bpd of light crude starting in 2023.
Around 65 percent of the award value is expected to go directly into the UAE economy thanks to the Adnoc's In-Country Value (ICV) program in line with the company's 2030 strategy.
This adds to the discovery of two billion barrels of conventional oil reserves, as well as 22 billion barrels of unconventional oil reserves, last November, which the UAE's Energy Minister Suhail al-Mazrouei said "reflect the constant development operations carried out by ADNOC in its endeavor to reach its target of increasing oil production capacity to 5 million bpd by 2030," in a tweet.
The UAE's Adnoc has been clear in its plans to ramp up oil production over the coming decade, partly due to the rebound in oil demand following a year of stagnation, but also due to fears of a demand peak later this decade.
However, this is not the country's only focus. As part of the UAE's plan to diversify away from oil, its gas industry is going from strength to strength. In fact, the state is aiming to become self-sufficient in gas supply by 2030.
The discovery of a natural gas reservoir earlier this year, situated between Abu Dhabi and Dubai, was the biggest of its kind from the last 15 years. The Jebel Ali reservoir presents an optimistic find for the UAE, with the potential to meet the country's gas needs for up to 30 years. In addition, the Sharjah emirate also announced an onshore gas discovery, its first since the early 1980s.
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The CEO of energy giant Crescent Petroleum explained of the diversification of the country's energy sector, "I think that's an exciting opportunity and it's one we hope to play a key role in, both in the UAE and wider in the region,". Further, "Our region overall, has roughly half the world's oil and gas proven reserves. And actually, there's probably still a lot more that isn't proven because exploration is under-explored."
While the UAE's traditional energy sector continues to boom, it isn't shying away from alternative energy developments. In fact, Abu Dhabi is hoping to become a world leader in green hydrogen fuel over the next decade.
At present, Adnoc already produces hydrogen for its downstream operations. However, last November Sheikh Mohamed bin Zayed delivered a mandate encouraging the exploration of hydrogen and ammonia derived from natural gas, to meet increasing international demand.
Adnoc will explore the country's blue and green hydrogen energy potential, through carbon capture in traditional energy production, as well as the extraction of gas from water using electrolysis fuelled by renewable sources. To this end, the Mohammed bin Rashid Al Maktoum Solar Park, based in Dubai, is expected to be the first solar-powered hydrogen plant in the Middle Eastern region.
Not only is the UAE continuing to develop its fierce oil industry, the country's aim to diversify its energy industry and economy has meant significant advances in gas, as well as cutting edge green energies such as hydrogen. This is certainly one to watch over the coming years.
By Felicity Bradstock for Oilprice.com
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Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK. More