The latest:
Three months after the UAE left OPEC, Adnoc is maximising crude output, buying assets abroad and building pipelines around the Strait of Hormuz, the Financial Times reported. The company says it can already pump 4.8mn b/d and has briefly tested 5mn b/d.
Details:
- The numbers:: UAE output averaged 4.1mn b/d in June, the highest in IEA records, despite war disruption, the agency said.
- The Hormuz problem:: Since March most Adnoc crude has struggled to reach buyers; a second Fujairah pipeline would double east-coast exports from 2027.
- The deals:: Adnoc merged petrochemicals with OMV’s feedstock arm into Borouge Group International, valued at $60bn, and closed the $17bn Covestro purchase.
- Africa entry:: Its distribution arm bought Shell’s South African fuel stations for $1bn, the FT said, giving the UAE retail reach in Africa’s largest economy.
- Analyst view:: “There’s a lot more excitement from international oil companies now that they’re no longer an OPEC member,” said Wood Mackenzie’s Dalia Salem.
Background:
Adnoc set a target in 2018 to lift capacity from 3.5mn b/d to 5mn b/d by 2030, later pulled forward to 2027. Chief executive Sultan al-Jaber championed expanded exploration after his 2016 appointment.
Between the lines:
Robin Mills of Qamar Energy said the strategy is an evolution of the past five or six years, but accelerated and more aggressive. Some observers suspect Adnoc wants to monetise reserves before demand peaks; al-Jaber insists demand will stay strong longer than many expect. The FT noted rumblings of a price war: Adnoc raised output to a record in June while Saudi Arabia cut official selling prices, especially to Asia. Falling global inventories during the Iran war may give both room for higher output. Adnoc says its strategy is unchanged and that OPEC membership is a matter for government authorities.
What’s next
Watch the second Fujairah pipeline’s 2027 start-up, Saudi official selling prices for signs of a price war, and whether Adnoc formally raises its capacity target above 5mn b/d with international partners.
Source:
