Home to approximately 95% of the UAE’s total oil reserves and 92% of its natural gas, Abu Dhabi is one of the world’s leading hydrocarbons producers and its energy sector is among the most developed. The main player in Abu Dhabi’s oil and gas industry is Abu Dhabi National Oil Company (ADNOC), the largest company in both the emirate and the UAE. While the global Covid-19 pandemic and subsequent steep decline in international oil prices that began in mid-February 2020 present challenges for the industry, the fundamentals underpinning the emirate’s energy sector remain strong. ADNOC doubled its refinery throughput between 2008 and 2018, and succeeded in attracting international investment by auctioning off both onshore and offshore blocks in 2018 and 2019. ADNOC continues to set ambitious targets for the sector’s development, aiming to raise oil production to 5m barrels per day (bpd) by 2030. At the same time, Abu Dhabi is working to achieve self-sufficiency in natural gas, while also meeting a larger proportion of its domestic energy needs through renewables and nuclear power.


At the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) in November 2019, ADNOC announced a new forward pricing mechanism for Murban, the light sweet crude oil obtained from Abu Dhabi’s onshore fields. In the same month US-headquartered Intercontinental Exchange (ICE) launched a new exchange, ICE Futures Abu Dhabi, to host the Murban listing. “Today’s announcement by ICE represents a historic milestone that offers our partners and customers significant benefits, and it places Abu Dhabi and the UAE at the geographic centre of global crude trading,” Sultan Ahmed Al Jaber, group CEO of ADNOC, and recently appointed UAE minister of industry and advanced technology, said in an address at the conference. This is particularly important as demand for light crude oil in Asia has risen in recent years. “The increased popularity of Murban crude oil reflects the global shift of energy markets to the East, and represents a huge opportunity for Abu Dhabi. There is a significant market for Murban, which is used in 61 refineries in Asia,” Christophe Sassolas, managing director of Total E&P UAE, told OBG.

Structure & Oversight

Oil was first discovered in what would later become the UAE in 1958, at the Bab field. The first well was completed in 1960, and the first export shipment left Jebel Dhanna port in December 1963. As oil revenue grew, ADNOC was created in 1971 by Sheikh Zayed bin Sultan Al Nahyan, ruler of Abu Dhabi from 1966 until 2004.

Governance of the UAE’s energy sector reflects the devolution of power to individual emirates. However, federal entities such as the Ministry of Energy and Industry, the Ministry of Climate Change and Environment, and the Ministry of Foreign Affairs and International Cooperation also influence energy policy. On the emirate level, the Supreme Petroleum Council (SPC) is the highest decision-making body for the oil and gas sector. Founded in 1988, the SPC is responsible for formulating petroleum policy in Abu Dhabi and also serves as ADNOC’s board of directors. The council is chaired by Sheikh Khalifa bin Zayed Al Nahyan, president of the UAE and ruler of Abu Dhabi. After his appointment as director-general in February 2016, Al Jaber introduced a series of measures to transform the structure and operations of ADNOC as part of a five-year plan to adapt to changing international energy markets. This followed a wider trend of reform in the UAE in response to falling oil prices in 2014-15 and paved the way for new sources of investment.

The emirate’s determination to maintain healthy levels of investment during challenging times for world energy markets paid dividends in 2019, with the announcement of new oil discoveries in November. Prior to this, the UAE’s proven crude oil reserves remained unchanged for more than a decade, at 97.8bn barrels, making them the seventh largest in the world, at 5.7% of the global total, according to BP’s “Statistical Review of World Energy 2019”. The new discoveries are projected to increase this to 105bn barrels; if this figure is officially revised, only Iraq, Iran, Canada, Saudi Arabia and Venezuela will have larger crude oil reserves than the UAE. “New discoveries this year include over 7bn barrels in oil reserves, 58trn standard cu feet (scf) of conventional gas and, significantly, 160trn scf of unconventional gas,” Al Jaber told delegates at ADIPEC 2019. “As a result, the UAE has moved from seventh to sixth place in the ranking of the largest oil and gas reserves in the world.” In June 2019 BP estimated that the UAE had proven natural gas reserves of 209.7trn scf, equal to 3.1% of the world’s total.

Performance & Size

In 2019 Abu Dhabi’s GDP at current prices was Dh915.3bn ($249.1bn), with mining and quarrying – which includes oil and gas – accounting for 40.8%, according to the “Statistical Yearbook of Abu Dhabi 2020” from Statistics Centre – Abu Dhabi (SCAD). This gave the mining and quarrying sector a value of Dh373.3bn ($101.6bn). The oil and gas industry’s share of GDP at current prices was 39.8% in 2019, compared to 40.8% in 2018 and 33.2% in 2017. At constant 2007 prices the oil and gas industry’s contribution was 46.5% of GDP.

The volume of crude oil produced in Abu Dhabi, excluding condensates, increased by 1.7% in 2019 to 1.12bn barrels. This was the equivalent of approximately 3.1m bpd, of which 2.4m bpd was exported, an increase from 2.3m bpd in 2018. In comparison, the emirate produced 3m bpd in 2018 and 2.96m bpd in 2017. There was a slight decline in production of natural gas in 2019, down 5.4% from 2.98trn scf in 2018 to 2.82trn scf, with production averaging 7.7bn scf per day. According to SCAD, there was also a slight decline in both the production and export of refined petroleum products in 2019, with production reaching 41.2m tonnes, down from 43.4m the previous year. Exports totalled 32.8m tonnes, compared to 34.8m tonnes in 2018. However, there was an increase in the production of liquefied natural gas (LNG) in 2019, with output rising by 9.2% to 28.3m tonnes, of which 27.7m tonnes was exported.

The performance of Abu Dhabi’s hydrocarbons sector, and to a large extent its wider economy and government revenue, is closely aligned with that of international energy markets. Lower oil prices often have a direct impact on the emirate’s annual government revenue, which decreased by 6.3% in 2019. Approximately 52.6% of this revenue was generated by petroleum royalties and taxes, compared to 56.1% in 2018, 47% in 2017 and 28.8% in 2016.

Upstream Activity

ADNOC’s exploration and production division comprises six branches: ADNOC Onshore; ADNOC Offshore; ADNOC Drilling; Al Yasat Petroleum; ADNOC Sour Gas; and Al Dhafra Petroleum. One of ADNOC’s key priorities is to increase its end-of-life recovery rate from its current level of 50% to 70% by 2030. ADNOC hopes to reach 60% by the end of its current concession agreements.

ADNOC Onshore is responsible for just over 50% of the UAE’s total oil and gas output from 11 fields. It was producing 2m bpd of crude oil in the first half of 2020 and aims to increase its output to 2.35m bpd by 2028. ADNOC holds a 60% share of its onshore arm, with BP holding 10%, followed by French energy major Total (10%), the China National Petroleum Corporation (CNPC, 8%), Japan Oil Development Company (5%), China’s ZhenHua Oil (4%) and South Korean conglomerate GS Energy (3%). ADNOC Offshore had an oil production capacity of 2m bpd in the first half of 2020. Offshore fields include Umm Shaif, Lower Zakum, Upper Zakum, Umm Al Dalkh and Sateh Al Razboot. It manages processing, export and storage facilities on Zirku and Das islands and operates 4000 km of subsea pipelines. ADNOC Drilling has drilled 8000 onshore and offshore wells since its first rigs were acquired in 1973. In November 2019 four new UAE-made rigs joined its fleet of 91 rigs as part of a major expansion programme to support ADNOC’s growing upstream activity. US oilfield services company Baker Hughes acquired a 5% stake in ADNOC Drilling in October 2018, making it the first foreign player to be awarded a share in one of ADNOC’s service companies. As part of the partnership with Baker Hughes, ADNOC Drilling was restructured to become a fully integrated drilling services business. ADNOC Drilling announced in September 2019 that it had completed its first offshore integrated services well in Umm Lulu, following several onshore integrated services wells that achieved a drilling efficiency increases of up to 25%. ADNOC aims to expand its conventional drilling activity by some 40% by 2025. ADNOC Sour Gas operates the Shah gas field, which produces approximately 10% of the UAE’s total natural gas output. A key by-product of the Shah gas plant’s process is sulphur. Its four recovery units produce 3.5m tonnes of sulphur per year, accounting for roughly 5% of the world’s total production of the chemical. The Shah field is served by two gas pipelines spanning 130 km and 67 km, along with Etihad Rail, which carries 10,000 tonnes of sulphur granules a day to Ruwais for export.

Al Yasat Petroleum was formed in 2014 as a joint venture with CNPC to explore new onshore and offshore fields. ADNOC has a 60% stake in the company, and CNPC owns the remaining 40%. Its onshore concession covers 7800 sq metres. Al Yasat’s offshore fields are Bu Haseer, Belbazem, Umm Al Dholou, Umm Al Salsal and Yaser. ADNOC also owns 60% of Al Dhafra Petroleum, with Korea National Oil Corporation and GS Energy holding the remaining 40%.


There are six companies in ADNOC’s downstream division. ADNOC Gas Processing has a capacity of 8.26bn scf of natural gas per day and was formed in 1978 as a joint venture with ADNOC (68%), Shell (15%), Total (15%) and Portugal’s Partex (2%). The production agreement was renewed in 2008 for a further 20 years and includes the Asab 0, Baba and Buhasa gas-processing facilities. ADNOC owns four other facilities outright: Asab 1 and 2, Habshan and Ruwais. ADNOC Gas Processing manages a 3000-km pipeline network, 26 processing trains and four natural gas liquids fractionation trains.

The gas-processing business plays an important strategic role in Abu Dhabi’s economy, generating revenue from exports while also providing feedstock for power generation, desalination facilities and industrial plants. ADNOC Refining operates one of the world’s largest refineries at Ruwais and underlines the company’s commitment to extracting maximum value from every barrel of crude oil it produces. Since January 2019 the company has been operated as a joint venture by ADNOC, the Italian energy multinational Eni, and the Austrian integrated oil and gas company OMV. The three companies hold 65%, 20% and 15% shares in ADNOC Refining, respectively. The partnership also entailed the establishment of a new global trading joint venture to facilitate the international export of ADNOC Refining products. With a refining capacity of 922,000 bpd, Ruwais sits at the centre of a 1600-km pipeline network supplying export and domestic markets with a range of fuels, some of which are further refined by other ADNOC companies. The company provides jet fuel for both Abu Dhabi International Airport and Al Maktoum International Airport in Dubai.

In addition to transport fuels, ADNOC Refining also produces specialist products such as base oils, carbon black and anode-grade coke. Since 2009 ADNOC Refining has also operated an innovation centre dedicated to developing technology and expertise to optimise the refining process. In June 2019 ADNOC announced it had acquired a 42% stake in Fertiglobe, a joint venture with OCI, a Dutch producer and distributor of nitrogen products, which holds the remaining 58%. Fertiglobe is the largest nitrogen fertiliser producer in the MENA region with a total production capacity of 6.5m tonnes of urea and merchant ammonia per year, and is expected to become the world’s largest exporter of nitrogen-based fertilisers.

ADNOC LNG is based on Das Island, located 160 km offshore of the UAE mainland. ADNOC owns 70% of the company, with the remaining equity shared by the Japanese industrial giant Mitsui (15%), along with BP (10%) and Total (5%). ADNOC LNG processes and produces LNG, liquefied petroleum gas, paraffinic naphtha and sulphur for export. The company also supplies 1bn scf per day of gas to the UAE.

ADNOC Industrial Gas is a joint venture between ADNOC – which holds a 51% stake in the venture – and the Ireland-headquartered chemicals company Linde Group, which owns the remaining 49% of the shares. It supplies liquid oxygen and nitrogen to other businesses in the group, including ADNOC Gas Processing and ADNOC Refining.

Borouge, is a 50:50 joint venture between ADNOC and Austria’s Borealis, a producer of plastic products and solutions. Following the sale of 39% of its stake in the company in late 2020, Mubadala Investment Company, the emirate’s sovereign investment vehicle for strategic development, is set to own 25% of Borealis, with the remaining 75% held by OMV. Mubadala also holds a 24.9% stake in OMV.


ADNOC’s marketing and distribution division consists of three companies. ADNOC Distribution operates 382 retail fuel service stations and 264 convenience stores located across the UAE. It sells fuels, lubricants and services to drivers as well as the maritime and aviation sectors. ADNOC Logistics and Services operates a fleet of 120 vessels, port and offshore marine services, and a 1.4m-sq-metre onshore logistics base. The company’s tankers carry LNG exports from ADNOC LNG’s liquefaction plant on Das Island to markets around the world. Abu Dhabi Crude Oil Pipeline is a wholly owned ADNOC company of significant strategic importance. It operates the 406-km pipeline that carries oil from Abu Dhabi’s onshore fields to Fujairah, the only emirate with a coastline on the Gulf of Oman. This means that the emirate can continue to export its crude oil while avoiding the Strait of Hormuz in the event of a threat to shipping at the narrow choke point between Oman and Iran. The pipeline’s significance was further underlined in May and June 2019, when Iran was blamed for attacks on four commercial vessels in the Gulf of Oman.

Imports & Exports

According to the latest detailed figures from SCAD, the emirate’s oil, gas and oil product exports totalled Dh217.4bn ($59.2bn) in 2018, representing 66% of the goods exported through Abu Dhabi’s ports, up 24% on Dh174.9bn ($47.6bn) in 2017. Abu Dhabi exported 480m barrels of crude oil in 2018, 31.4% of which was bought by Japan. Of the 13 major importers of the emirate’s crude oil, 11 were in the Asia-Pacific region. After Japan, the five leading importers in percentage terms were India (16.7%), South Korea (10.3%), China (9.3%), Singapore (7.9%), and Pakistan (7.3%). Abu Dhabi also exported 30.2m tonnes of refined petroleum products in 2018. The Netherlands was the largest recipient, accounting for 14.7%, followed by Japan (13%), South Korea (11%), China (9.3%), Singapore (8.4%) and the US (8.2%).

In 2018 ADNOC sold 5.4m tonnes of LNG, of which 4.85m tonnes went to Japan, according to company figures. Although Japan has historically been the largest importer of LNG from Abu Dhabi, ADNOC’s long-term contract with Japanese utility Tokyo Electric Power Company ended in March 2019. As a result, India has since become the largest importer of LNG from the UAE. The emirate imported 793.3bn scf of natural gas in 2019, or 2.2bn scf per day, through the Dolphin subsea pipeline from Qatar operated by Dolphin Energy, a multinational company 51% owned by Mubadala in partnership with Total and US-based Occidental Petroleum. The pipeline from gas-processing facilities in Qatar comes ashore at Taweelah, and from there the gas is piped to Dubai and Oman. According to Mubadala Investment Company, Dolphin Energy currently meets approximately 30% of the UAE’s gas needs.


Strategic investment in oil and gas is a key aspect of the emirate’s plans to support social and economic development. To this end, Mubadala has formed partnerships with companies across the hydrocarbons value chain and invested in projects around the world. Upstream firms under its umbrella include Mubadala Petroleum, which owns production assets in South-east Asia, including three fields in Thailand. Mubadala also has a 12.9% share in Oil Search, a company focused on exploration and production in Papua New Guinea.

Mubadala’s exploration and production division generated Dh5.5bn ($1.5bn) in revenue in 2019, according to the firm’s yearly report. This represented a 3.5% increase on 2018, when the division generated Dh5.3bn ($1.4bn).

ADNOC has forged partnerships with international firms since its first oil was found and continues to seek out new agreements. April 2018 marked the start of the first of two bidding rounds for licences to drill and develop onshore and offshore hydrocarbons concessions (see analysis). The second round was launched in May 2019 and closed in December of that year, with the results expected to be announced before the end of 2020. This was the first time a competitive bidding strategy had been used by ADNOC. Under the block licensing model, the winning bidders are awarded an exploration block in return for an exploration investment and participation fee over an agreed period of time. ADNOC is permitted to retain a 60% stake in the blocks in the event that a commercially viable discovery is made.


While ADNOC continues to encourage international participation in its activities, the company has also taken a significant step to ensure enterprise partners and suppliers are passing the benefit of their involvement on to Emirati employees and local businesses with the introduction in 2018 of its in-country value (ICV) programme. The ICV programme requires companies to submit a formal audit of their contribution to the emirate’s wider economy each financial year. As of April 2019, 12 audit firms had been licensed to conduct assessments and 2000 firms had been certified. In November 2019 ADNOC announced that its ICV programme had generated Dh26bn ($7.1bn) for the UAE’s economy in the first 11 months of the year, bringing the total to Dh44bn ($12bn) since its launch. The company also reported that the programme helped to generate around 1500 jobs for Emirati nationals since January 2018.

In November 2019 ADNOC also signed agreements with Abu Dhabi Ports and local real estate firm Aldar Properties to adopt the ICV programme, with the aim of collaborating on Emiratisation strategies and local sourcing of goods and services. Although steps have been taken to support the local workforce, some sector stakeholders have argued that current efforts could be expanded.

Infrastructure & Renewables

ADNOC has also been working with international consortia to attract investment for its own infrastructure developments. In September 2019 ADNOC signed an agreement with GIC, Singapore’s sovereign wealth fund, for a $600m pipeline. This follows a deal between ADNOC and US asset management firms BlackRock and KKR in June 2019, and a further investment from Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF) in August 2019. Under this arrangement, a new entity was formed known as ADNOC Oil Pipelines. The entity is 51% owned by ADNOC, while BlackRock and KKR hold a combined 40%, ADRPBF 3% and GIC 6%. As a result of these agreements, ADNOC generated $4.9bn in foreign direct investment in its pipeline infrastructure.

More recently, in late June 2020 ADNOC announced that it entered into a $20.7bn agreement with a consortium of international investors comprising Global Infrastructure Partners, Brookfield Asset Management, GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities, and Snam. ADNOC will hold a 51% stake in the newly formed subsidiary ADNOC Gas Pipeline Assets, and retain ownership of the pipeline and full operational controls, while the consortium will acquire the remaining 49% stake.

Alongside continued investment in hydrocarbons, the authorities are looking to renewable energy as a way to extract the maximum value from the emirate’s oil and gas wealth by exporting crude oil and petroleum rather than consuming it. To this end, the Masdar City project was launched in 2006 by Abu Dhabi Future Energy Company, also known as Masdar, a subsidiary of Mubadala. The city was designed to be a sustainable urban community and a centre for renewable energy technology.

In June 2019 Emirates Water and Electricity Company announced that commercial operations had begun at the Dh3.2bn ($871m) Noor Abu Dhabi solar park at Sweihan. The 1.17-GW solar park – which has been hailed as the largest single-site development of its kind in the world – has the capacity to provide power to around 90,000 households.


While the sector faces challenges as a result of the Covid-19 pandemic, Abu Dhabi retains strong fundamentals. Both ADNOC and Mubadala have forged partnerships and trade agreements to allow citizens to reap the benefits of international best practices, while also securing long-term contracts to supply their products to growth markets. Meanwhile, new exploration projects and continued investment in renewables are set to help the emirate move closer to self-sufficiency and expand exports.