With nearly 10 percent of the world’s total supply of proven crude oil reserves, the United Arab Emirates is an important and strategic player in global energy markets. Oil exports account for about 30 percent of the U.A.E.’s economy, and the country has taken important steps to ensure the reliable and safe delivery of hydrocarbons to global markets in turbulent geopolitical times – most notably by constructing the Abu Dhabi Crude Oil Pipeline, which allows oil to bypass the Strait of Hormuz.
In addition to this global role, the U.A.E. has instituted domestic reforms to expedite oil and gas production. ADNOC revised a 2030 target to increase crude oil production capacity to 5 million b/d by 2027. The U.A.E. is investing in increased hydrocarbon production and building new midstream and downstream infrastructure to accommodate future growth. One key trend is that conventional energy production in the U.A.E. has become more diffuse with facilities across the country. In 2022, ADNOC announced the discovery of natural gas resources offshore the Emirate of Abu Dhabi. The U.A.E. is keen on building its capacity for offshore gas production in a shifting global energy market.
The U.A.E. also seeks to become a leader in carbon capture, utilization, and storage (CCUS) technology and is building carbon capture plants, including the Habshan carbon capture plant (one of the largest CCUS facilities in the Middle East and North Africa region). The U.A.E. Consensus that emerged during COP28, which includes a stipulation of reaching net zero by 2050, is driving momentum towards CCUS projects.
The U.A.E. is also planning a more active investment role internationally in the conventional energy sector. In 2022, ADNOC announced an ambitious global expansion plan, which included targeting investment opportunities in the petrochemicals and gas verticals. ADNOC established its international investment arm XRG to strengthen the U.A.E.’s role as a reliable energy supplier. XRG’s international ambitions extend to the U.S. market where it acquired a stake in phase one of NextDecade’s Rio Grande liquefied natural gas export (LNG) project in Texas. This investment is a low-carbon project and is ADNOC’s first significant investment into the U.S. market. Future investments are part of a broader push to deepen U.S.-U.A.E. energy ties, with the enterprise value of U.A.E. energy investments into the US projected to hit $440 billion by 2035.
The U.A.E. has a long history of welcoming private sector and foreign investment into its upstream and downstream oil and gas exploration and production sectors. In this regard, major U.S. companies including ExxonMobil and Occidental Petroleum have inked partnerships with Abu Dhabi.
The U.S.-U.A.E. Business Council is proud of the role it has played in promoting bilateral cooperation between key stakeholders in the U.S. and U.A.E. oil and gas sectors. The U.S.-U.A.E. Business Council regularly hosts events with key U.S. and U.A.E. energy officials, such as former U.S. Energy Secretary Chris Wright, U.A.E. Minister of Energy and Industry, H.E. Suhail Al Mazrouei, and ADNOC leadership.
The U.S.-U.A.E. Council also provides vital information about this important sector through its regular media digests and supplementary materials such as its report on the U.A.E.’s oil and gas sector.
Key Institutions