An in-depth look at the UAE’s ADNOC oil empire

ADNOC’s global reach

ADNOC has long placed interest in the European market – a strategic move driven by a combination of economic and geopolitical considerations. Europe is home to a host of leading energy companies and technology providers with expertise in areas such as renewable energy, carbon capture, and storage.

With the decreasing demand for Russian energy reserves, the UAE has high hopes of replacing its Russian counterpart in Europe.

The nation is using ADNOC to seek and establish long-term contracts for the supply of liquefied natural gas (LNG), crude oil, and refined fuels with the main focus being LNG. By 2024, the company’s subsidiary, ADNOC Trading aims to open an office in Geneva.

ADNOC’s current export strategy heavily favors Asian markets, leaving it vulnerable to economic fluctuations or regional instability. By penetrating the European market, ADNOC aims to diversify its customer base while mitigating potential risks and ensuring a more stable revenue stream.

Recently, the company has considered offering to buy Wintershall Dea, Germany’s largest producer of crude oil and natural gas for $11 billion. It has also discussed the purchase of Covestro, a German chemical company worth $12 billion, and is keen to merge UAE’s Borouge and Austria’s Borealis.

ADNOC’s desire to thrive within Asia is evident from its numerous investments and joint ventures across the region.

In India, ADNOC is collaborating with Saudi Aramco to establish a 1.2 million barrels per day – the enterprise reportedly worth a cool $70 billion. Meanwhile, stakes have been secured in major refining and petrochemical businesses in Indonesia and Thailand.

The Middle Eastern company and South Korea have a strong and long-standing relationship too, with South Korea being a key importer of ADNOC’s oil and gas products. In 2021, ADNOC signed an agreement with the Korean National Oil Corporation (KNOC) to use tanks in South Korea to store 4 million barrels of crude oil.

Why is ADNOC so controversial right now?

Surprisingly, ADNOC has committed itself to decarbonization efforts to advance towards net zero.

The company signed an agreement with an Australian company, Santos, in a joint management platform that would support mitigation within the Asia-Pacific region. The collaboration would see both entities pool their respective resources for carbon capture and storage technologies, among other ventures.

Recently, ADNOC also announced a joint initiative with the State Oil Company of Azerbaijan Republic (SOCAR) to develop low-carbon energy solutions with the same goal of advancing decarbonization.

Yet, with fossil fuels remaining the lead contributor to the climate crisis, Al Jaber has played down the impact the oil and gas industry has on the environment.

Many have raised concerns over the possibility of an increase in the exploitation of fossil fuels with COP28 inexplicably being led by an oil tycoon. Al Jaber even mentioned that there was “no science” behind the notion that fossil fuels had to be removed from energy systems to prevent the global temperature from rising.