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ADNOC CEO seen steering NOC to survive energy transition, monetize assets


Sultan al-Jaber speeding up plans to boost output capacity by 2030

ADNOC working on hydrogen projects, cutting GHG intensity by 2030

Jaber is industry and advanced technology minister

  • Author
  • Dania Saadi
  • Editor
  • Debiprasad Nayak
  • Commodity
  • Coal Electric Power Natural Gas Oil Petrochemicals
  • Topic
  • Energy Transition

Sultan al-Jaber, the CEO of Abu Dhabi National Oil Co., the UAE's biggest energy producer, is steering the national oil company to be part of the energy transition age even as the company races to develop its oil and gas reserves before they become stranded assets.

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Jaber, who has been ADNOC CEO since 2016, is developing these twin strategies while wearing a number of hats that will help him in developing policies for the NOC.

ADNOC CEO Sultan Al-Jaber seen steering NOC to survive energy transition, monetize assets

Last year, Jaber was named minister of industry and advanced technology and UAE special envoy for climate change. In 2020, he was also appointed a member of Abu Dhabi's Supreme Council for Financial and Economic Affairs, a new decision making body that will also oversee and set energy policies in the oil-rich emirate, with Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed acting as vice-chairman. The Supreme Petroleum Council, which used to be the highest energy decision-making body in Abu Dhabi, was merged with the new council.

"Crown Prince Mohamed bin Zayed is the architect of the energy policy shift since 2016, and Sultan al-Jaber is its driving force," said Ben Cahill, senior fellow, Energy Security and Climate Change Program, at the US-based Center for Strategic and International Studies. "ADNOC has been transformed from a sleepy state company, content to rely on longstanding relationships with trusted partners, to a much more ambitious and dynamic company."

Monetize assets

Since 2016, ADNOC has taken on new partners from Russia to India to be part of its oil and gas concessions while maintaining ties with its old Western partners.

ADNOC has also sought to monetize its assets, selling stakes in its oil and gas pipelines to a select group of companies that include BlackRock, the world's biggest asset manager, and KKR & Co., to name a few.

In 2017, it floated on the Abu Dhabi Securities Exchange 10% of its fuel-retailer unit, ADNOC Distribution, raising $851 million in the Gulf region's first IPO of a unit of an NOC.

"Abu Dhabi always took a cautious approach and aimed to conserve substantial oil resources for future generations. They've made a major pivot since 2016," said Cahill. "They've sought to unlock value from all resources, develop neglected assets, and generally push everything forward faster. They've fundamentally reshaped the approach to oil sector governance, and have pushed through a big culture change at ADNOC (not without some growing pains)."

Now ADNOC is accelerating plans to boost its oil production capacity to 5 million b/d by 2030 from over 4 million b/d now. It is seeking the help of international oil companies to help reach its goal.

It is also collaborating with foreign oil firms in refining and petrochemical development. In 2018, it sold a 35% stake in ADNOC Refining to Eni and OMV, while retaining the remainder.

"Abu Dhabi, as you might imagine, does not want to be stuck with stranded reserves when climate restrictions start to bite," said Jim Krane, Gulf energy analyst at Rice University's Baker Institute.

"ADNOC even sold off half of its pipeline division to raise cash to fund the upstream push, as well as a big shift toward petrochemicals, a non-combustion use for crude oil that is insulated from climate action."

ADNOC scholar

Jaber began his career as an ADNOC scholar, studying for a chemical engineering degree and later on worked as a field operator at the NOC.

He also worked for Mubadala Development Co. (now Mubadala Investment Co.), the sovereign wealth fund that manages more than $232 billion in assets and is involved in economic diversification efforts in Abu Dhabi. At Mubadala, he was CEO of energy and helped establish Masdar, the clean energy firm that now has a renewables portfolio of over 10.7 GW.

"Al-Jaber brings his solar boom model to the national oil company and what a difference it makes," said Krane. "Al-Jaber's creativity is a major factor in transforming ADNOC from a staid NOC into a risk-taking integrated energy firm."

Now Jaber, with his many hats, is steering ADNOC through what could be its biggest challenge yet, the energy transition age.

ADNOC has pledged to lower its greenhouse gas emissions intensity by 25% by 2030. It also plans to increase by six-fold the amount of CO2 it captures and stores by 2030.

ADNOC has also teamed up with Mubadala and Abu Dhabi investor ADQ to make the emirate a leader in green and blue hydrogen.

With Jaber's expertise in investments through his stint at Mubadala, renewables through Masdar and energy through ADNOC, the NOC may yet survive the energy transition challenge.

Photo from ADNOC