The UAE’s largest oil company, ADNOC, this week approved its oil investments for the next five years, to US$122 billion. As ADNOC’s five-year plans go, it’s not the largest, (2019-2023 5-year plan was $132 billion), but considering what a rough year 2020 has been for oil demand, it’s considerable. It may seem counterintuitive to pour substantial investments into oil production and oil refining at a time when OPEC is pulling back the reins on its producers in an attempt to draw down global oil inventories and rebalance the market that was thrown off-kilter with the pandemic and the oil price war waged by Saudi Arabia and Russia. But five years is a long time, and clearly, ADNOC sees oil demand rebounding to the point it would call for an increase in production.  

In fact, ADNOC is planning to increase its oil production capacity from 4 million bpd to 5 million bpd within the next ten years.

And it now has the means to do it. After finding 2 more billion barrels of conventional oil and 22 billion barrels of unconventional oil (bringing its total to 107 billion barrels of recoverable oil), Abu Dhabi is champing at the bit. The generous budget figure, taken in conjunction with last week’s undenied rumor that Abu Dhabi was contemplating a withdrawal from the oil cartel, could be another outward expression of the UAE’s distaste for the current level of cuts, and a sign to Saudi Arabia–and Russia–that it wants favor in the…

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Via Oilprice.com

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