UAE energy group Adnoc to boost spending on decarbonisation projects

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UAE state energy company Adnoc is to boost spending on decarbonisation projects — a month after its chair presided over the UN COP28 climate summit where countries agreed to transition away from fossil fuels.

Adnoc’s board, which includes the country’s vice-president and the crown prince of Abu Dhabi, agreed to increase investment in the sector to $23bn by 2030 from the previous $15bn, the company said.

Adnoc in 2022 launched a plan to spend $150bn on capital expenditure in five years, mainly to expand its oil and gas production capacity.

The capital expenditure also includes investment in sectors such as chemicals and clean energy, as it seeks to diversify its business as the world moves away from fossil fuels.

Adnoc chief executive Sultan al-Jaber said the company “continues to deliver on its mandate to transform, decarbonise and future-proof its business”.

He added that Adnoc was “committed to enabling a lower-carbon future and a just, orderly and equitable energy transition”.

At the COP28 summit, Al-Jaber was instrumental in brokering a deal among a diverse set of countries and stakeholders, often with contradictory interests.

Despite criticism over the meeting being chaired by an executive of an oil company, the final agreement from the gathering included a reference to fossil fuels for the first time in three decades of UN climate agreements.

But with the agreement failing to support the phaseout of fossil fuels, climate campaigners and global officials have said it does not go far enough to cut greenhouse gas emissions to be compatible with limiting global warming to 1.5C.

Adnoc has been active in investing in areas such as carbon capture.

This month, it announced an investment into Storegga, the lead developer of the UK’s Acorn carbon capture project that is planned near Aberdeen, the UAE company’s first overseas investment in carbon capture and storage.

In September, it decided to go ahead with Habshan carbon capture project, one of the largest of its kind in the Middle East and north Africa region.

The group has also been active in dealmaking more broadly, seeking large tie-ups across a variety of geographies and sectors.

Adnoc is in talks with the German chemical company Covestro on a potential acquisition that could value the group at roughly €14bn.

It has also held discussions with Austrian energy group OMV over a deal that could combine their chemical divisions.

Adnoc last year brought forward its net zero emissions target to 2045 from 2050, and it has a target of zero methane emissions by 2030.