UAE: Abu Dhabi Energy

Plans by Abu Dhabi to invest more than $25bn over the next five years to increase offshore oil production capacity look set to secure the emirate’s position as a leading oil producer, amidst a global decrease in oil and gas capital expenditure. 

Looking to reduce its imports and at the same time meet growing energy demands, Abu Dhabi is seeking to develop its sour gas reserves, both on and off-shore.

The Abu Dhabi Executive Council recently approved the building of a 10th independent water and power project (IWPP). The increased capacity this new facility will bring is expected to help the emirate meet its rising demand for utilities.

With demand for electricity and water rising quickly, authorities in Abu Dhabi have taken steps to reduce consumption, including the introduction of a billing system that will indicate usage more clearly to consumers. Meanwhile, a recent study by an international consultancy firm shows that the introduction of some power-saving techniques could reduce electricity demand in the UAE by up to 50%.

Abu Dhabi is putting the final touches on an oil pipeline that will allow the emirate to bypass the congested Strait of Hormuz, through which about 40% of all sea-borne crude is currently shipped. Completion of the project is viewed as increasingly timely, not only in reducing congestion in the Straits but also as geopolitical tensions with Iran have escalated in recent months.

The face of Abu Dhabi’s oil industry could be set for a major makeover, with long established international operators facing increased competition for existing concessions and new contracts due to be agreed in coming years. In particular, energy-hungry Asian states are queuing up to gain access to the emirate’s oil fields.