Abu Dhabi aims to beat oil output targets

26 September 2013

Whether Abu Dhabi hits its oil output targets or not, the emirate has shown it is still committed to investing in upstream assets

Three years ago, Abu Dhabi outlined its plans to increase crude oil production capacity by almost 30 per cent to 3.5 million barrels a day (b/d) by 2018, a target that now looks ambitious given the lengthy pre-execution phase of several key projects.

The emirate’s strategy was to invest both onshore and offshore to develop new fields and expand existing fields, while maintaining production from maturing fields through enhanced oil recovery (EOR) techniques.

The current crop of onshore developments were started in 2009 and are now being commissioned. Since then, Abu Dhabi National Oil Company (Adnoc) has switched its focus to offshore. Over the past year, Adnoc’s subsidiaries have awarded about $11bn in engineering, procurement and construction (EPC) contracts for its offshore fields at Upper Zakum, Satah al-Razboot (Sarb) and Umm al-Lulu. Major contracts on the Nasr field are set to be awarded next year.

But according to reports citing industry sources, delays on offshore projects have caused Abu Dhabi’s Supreme Petroleum Council (SPC) to push back the deadline for its 3.5 million-b/d target to 2020.

The larger EPC contract on the Upper Zakum project was awarded in April, despite technical bids being submitted a full year earlier. The smaller EPC contract on the development took almost 18 months from the tender to the contract award. These delays will likely cause the next phases of the project to be set back.

However, the news about a new onshore development shows that SPC’s expansion plan does not stop at the projects already announced. The $1bn-plus scheme will significantly increase the capacity of the Sahil and Qusahwira fields beyond the expansions started in 2009. It will also add production from the Mender field, next to the borders with Saudi Arabia and Oman, for the first time.

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