Adnoc Drilling clinches $1.15bn jackup rigs deal – and what is the UAE’s energy mix and how does oil and natural gas play?

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• Current Energy Mix:
  • Natural Gas: Approximately 61% of domestic energy consumption is met by natural gas. In 2017, natural gas accounted for 62.1 million tons of oil equivalent in total energy consumption.
  • Oil: Crude oil contributes significantly to the remaining domestic energy demand, approximately 39%, with 45 million tons of oil equivalent consumed in 2017.
  • Renewables: The UAE began utilizing solar photovoltaic (PV) potential in 2014, and renewable energy is growing, particularly in solar. By 2025, Abu Dhabi and Dubai are expected to account for over 90% of renewable capacity, driven by major solar projects like the Al Dhafra Solar PV (2 GW) and Mohammed bin Rashid Al Maktoum Solar Park (planned 5 GW by 2030).
  • Nuclear: The Barakah Nuclear Power Plant, with four operational reactors, provides 25% of the UAE’s electricity needs, generating 40 TWh annually, enough to power over 500,000 homes.
  • Other Sources: Emerging contributions from wind (e.g., a 104 MW wind program launched in 2023) and hydrogen (with plans to produce 1 million tons of green hydrogen annually by 2030) are small but growing.
• UAE Energy Strategy 2050 Target:
  • 44% renewables
  • 38% natural gas
  • 12% clean coal
  • 6% nuclear

• Oil Production:
  • The UAE is the world’s seventh-largest producer of total liquid fuels and the third-largest in OPEC, with a production capacity of approximately 4.0–4.5 million barrels per day (b/d) as of 2023, though actual production is lower due to OPEC+ quotas. In April 2025, crude oil production was reported at 2.911 million b/d.
  • The Abu Dhabi National Oil Company (ADNOC) aims to increase production capacity to 5 million b/d by 2027, revised from an earlier 2030 target.
  • The UAE holds 111 billion barrels of proven crude oil reserves (as of early 2023), with 96% located in Abu Dhabi, particularly in the Zakum field, the third-largest in the Middle East.
• Oil Exports:
  • The UAE is a major oil exporter, with crude and condensate exports reaching a 7-year high of approximately 3.9 million b/d in 2024.
  • In 2016, the UAE exported 66% of its oil production, equivalent to 2.487 million b/d.
  • Infrastructure like the Abu Dhabi Crude Oil Pipeline (1.5 million b/d capacity) allows exports to bypass the Strait of Hormuz, enhancing energy security.
• Natural Gas Production:
  • The UAE produced 1.9 trillion cubic feet (Tcf) of natural gas in 2013 and holds 215 Tcf of proven reserves, ranking seventh globally.
  • In 2022, natural gas reserves increased by 1 Tcf, and ADNOC is working toward gas self-sufficiency through projects like the Ruwais Diyab unconventional gas concession.
  • The UAE is developing a new LNG plant in Fujairah, aiming to produce 9.6 million tons annually, more than doubling its LNG export capacity.
• Natural Gas Exports and Imports:
  • The UAE is a net importer of natural gas, primarily from Qatar via the Dolphin pipeline, due to high domestic demand (exceeding production) and the use of 30% of gross production for enhanced oil recovery (EOR).
  • Domestic consumption in 2017 was 62.1 million tons of oil equivalent, surpassing production, necessitating imports.
  • ADNOC’s creation of ADNOC Gas in 2023 consolidates gas processing and LNG marketing to boost exports and efficiency.

Key Points

• The UAE’s energy mix is predominantly natural gas (61%) and oil (39%), with growing contributions from nuclear (25% of electricity) and solar. The UAE Energy Strategy 2050 aims for a balanced mix with 44% renewables by 2050.
• Oil production is around 2.9–3.2 million b/d (capacity 4.0–4.5 million b/d), with exports at ~3.9 million b/d in 2024. ADNOC targets 5 million b/d by 2027.
• Natural gas production is significant, but the UAE remains a net importer due to high domestic demand and EOR needs. LNG export capacity is set to expand with the Fujairah plant.
• The UAE is investing heavily in renewables (e.g., solar, hydrogen) and nuclear to diversify its energy mix and meet net-zero goals by 2050, while maintaining its role as a major oil and gas exporter.

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