UAE's ADNOC ups crude production capacity to 4.85 million b/d

Abu Dhabi National Oil Co. has upped its crude oil production capacity to 4.85 million b/d from 4.65 million b/d, according to a recent update on its website, bringing the state-owned producer closer to its target of 5 million b/d by 2027.

It's unclear when this milestone was reached or where the added capacity stems from, and a spokesperson declined to comment.

ADNOC, which produces and sells the vast majority of the UAE's crude, has been aggressively spending upstream to boost capacity as it seeks to maximize its hydrocarbon resources in the face of increasing market competition and energy transition pressures.

However, the UAE is currently limited to a production quota of 2.91 million b/d through the end of June under the OPEC+ supply accord. The UAE exceeded its quota by 40,000 b/d in March, pumping 2.95 million b/d, according to the latest Platts OPEC+ survey by S&P Global Commodity Insights.

If the claimed production capacity is true, that means the country is holding 900,000 b/d -- or some 18.6% -- of its capacity offline.

The country has in the past chafed against its OPEC+ quota, citing its recent expansions in production capacity, which come as several other members, notably in Africa, struggle to fulfill their allocations due to underinvestment.

The OPEC+ alliance is set to meet June 1 in Vienna to discuss production quotas for the second half of the year.

To help meet its 2027 target, ADNOC is spending $150 billion over 2023-2027, an amount that is higher than the last five-year expenditure plan of $127 billion over 2022-2026.

ADNOC's largest crude stream is the onshore-produced Murban, a light sour grade that accounts for roughly half of the company's production capacity and underpins a futures contract traded on the ICE Futures Abu Dhabi exchange.

ADNOC and IFAD are also considering to launch a crude futures contract for ADNOC's second largest stream, Upper Zakum, a medium sour grade produced offshore. Other ADNOC crudes include the light sour Das Blend and Umm Lulu.

Despite boosting oil production capacity by an additional 200,000 b/d, ADNOC has committed to hit net-zero Scope 1 and Scope 2 emissions by 2045. The company has said it will spend $15 billion on clean energy projects by 2027 to help lower its carbon footprint. It also plans to lower its upstream carbon intensity level by 2030.