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UAE To Hit Its Oil Capacity Increase Sooner Than Expected

The United Arab Emirates is set to achieve its oil production capacity goal ahead of schedule, with the Abu Dhabi National Oil Co. (Adnoc) expected to reach a capacity of 5 million barrels per day by the end of 2025 or early 2026, surpassing its original target of 2027, according to anonymous sources who spoke to Bloomberg.

This accelerated timeline is anticipated to create friction within the Organization of Petroleum Exporting Countries and its allies (OPEC+), which will review member capacities later this year to set production baselines for 2025.

Currently, Abu Dhabi is producing around two-thirds of its capacity, but the government-owned Adnoc is aggressively expanding its drilling activities and enhancing its infrastructure to maximize output. The company's $150 billion investment plan aims to expedite capacity additions, ensuring that the increased production capabilities do not remain underutilized.

Earlier this month, Adnoc quietly updated its maximum crude oil production capacity figure on its website, without making an official announcement. It’s current capacity, according to that updated figure, is 4.85 million bpd—up from the 4.65 million bpd.

The UAE’s oil production fell in March, according to OPEC’s secondary sources, as the OPEC+ group struggles to bring down production to agreed upon levels. Moving up its capacity addition timetable could heighten tensions within OPEC+, particularly with Saudi Arabia, ahead of the group’s meeting scheduled to take place this weekend.

The UAE—OPEC’s third-largest producer—has clashed with the OPEC group in the past as it is anxiously waiting to boost its oil production and tap its increased capacity. Last summer, the UAE said it would not join in OPEC’s voluntary production cuts and has argued for years that it should be allowed to pump more as it lifts its production capacity. And last June, OPEC+ caved and revised the UAE’s quota up to 3.219 million bpd for 2024.

 Despite this potential discord, the UAE remains focused on leveraging its oil resources to bolster its economy, which, while diversified, still relies significantly on crude exports.

By Julianne Geiger for Oilprice.com

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Leave a comment
  • Mike on May 24 2024 said:
    capacity

    actually

    different
  • Mamdouh Salameh on May 24 2024 said:
    In 2021 OPEC raised UAE's production quota to 3.50 million barrels a day (mbd) after a tiff with Saudi Arabia and yet UAE has never been able to produce its quota.

    Therefore , the the announcement that the Abu Dhabi National Oil Co (ADNOC) is expected to reach a capacity of 5 mbd by the end of 2025 or early 2026 is aimed at pre-empting being asked to make a voluntary production cut during OPEC+ meeting on 2 June.

    Moreover, if UAE hasn't been able to produce its OPEC quota, how could it have an updated a production capacity of 4.85 mbd?

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

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