State-owned Abu Dhabi National Oil Company (Adnoc) is fast approaching its long-awaited target of reaching a production capacity of 3.5 million barrels a day (b/d) before the end of the year.

This is up from about 3.3 million b/d in the middle of the year, with most of the increase coming from two offshore oil fields, Umm Lulu and Satah al-Razboot (SARB).

“The Umm Lulu and SARB fields will make a material contribution to Adnoc’s production capacity target of 3.5 million barrels by end of 2018. The initial production capacity of the two fields is 50,000 b/d, which will ramp up to 129,000 b/d by the end of the 2018 and 215,000 b/d by 2023,” an Adnoc spokesperson said.

Umm Lulu and SARB are two fields in a new concession created by Abu Dhabi earlier this year.

Adnoc awarded a 20 per cent stake in the new concession to Austria’s OMV in April, along with 20 per cent to  Spain's Cepsa. Adnoc retains 60 per cent ownership of the concession. Cepsa is owned by Abu Dhabi wealth fund Mubadala Investment Company.

The fields contribute to Adnoc’s newest oil export grade, known as Umm Lulu Oil, a low sulphur crude with a gravity of 39 API degrees. The first cargo was lifted in July, and now Adnoc has begun marketing the crude to its Asian customers for November. It is expected to sell between 1 and 2 cargos a month, the spokesman said.

Adnoc, which accounts for nearly all of the UAE’s crude oil output, is currently producing just under 3 million b/d. Once it hits 3.5 million b/d of capacity, the Opec producer will have some 500,000 b/d of spare capacity, which it can use to plug the expected gap from reduced oil exports out of Iran. The US’ Trump administration reinstated sanctions on the Islamic Republic in May, and the measures against Iran’s oil sector will take effect from 4 November.

The UAE, which currently holds the rotating Opec presidency, will be well placed to step in to provide more crude, covering customers who previously bought from Iran. Other producers such as Iraq and Saudi Arabia are also looking to fill the Iranian void. The question of how much increased production Opec members will be able to sustain, will be a key topic at the producer groups’ next meeting in Vienna on 3 December.