DUBAI: Abu Dhabi National Oil Co. plans to increase its capacity to produce petrochemical products by 150% by 2025, in an effort to meet a long-term increase in demand in Asia. The state-run oil company will boost its annual production of petrochemical products from the current 4.5 million tons to 11.4 million tons. At the 11th annual Gulf Petrochemicals and Chemicals Association forum held in Dubai on Nov. 28-29, ADNOC chief executive Sultan al-Jaber said: “We will drive operational efficiencies at every step of our production process and exploit the full portfolio of derivatives from naphtha to maximize value and maintain strong margins.” He said ADNOC would produce more aromatic series and polyolefin, which are used to make petrochemical products, and beef up refining of gasoline to meet future domestic demand. Investment amounts and the names of facilities affected have not been released.
Al-Jaber said he wants to focus on growing Asian markets, betting that the region’s demand for petrochemical products will double by 2030. China and India, already major customers of Middle Eastern oil producers, will become even more important. In its five-year plan approved by the country’s Supreme Petroleum Council in November, ADNOC said it would strengthen refining and other downstream operations. The company has also set a goal of increasing crude production to 3.5 million barrels per day by 2018.
OPEC agreed to its first production cut in eight years at a Nov. 30 meeting. The United Arab Emirates also agreed to slash its output by about 140,000 barrels per day from 3.01 million barrels per day in October. However, production cuts are set to start in January and last only six months. Saudi Arabia, the cartel’s key player, believes capital spending will be necessary to cater to long-term demand even amid slumping crude oil prices. The UAE plans to continue investing in development, too.
Meanwhile, al Jaber hinted that petrochemical companies in the six Gulf Cooperation Council countries, which include the UAE and Saudi Arabia, should join forces on investment to become more competitive and increase market share. ADNOC’s plan to increase petrochemical products could prompt Middle Eastern petrochemical companies to spur investment and promote reorganization. Yousef Abdullah al-Benyan, chief executive of Saudi Basic Industries Corp., the country’s largest petrochemical company, said at a November meeting that it would be difficult for smaller companies to maintain synergy in the future. He said mergers will be needed to remain competitive.
