Adnoc said on Sunday it will award Dh200 billion ($55 billion) in project contracts over the next three years, accelerating a construction push that doubles as a bet on the UAE's industrial economy.
The contracts, spanning upstream and downstream operations, represent the first major tranche of the $150 billion five-year capex plan the company's board approved last November. They come just days after the UAE formally exited Opec and less than 10 weeks since Iranian missile and drone strikes damaged energy infrastructure across the country, including gas facilities at the Habshan complex central to Adnoc’s own operations.
Following the UAE's exit from Opec, Abu Dhabi has room to pursue its ambition to raise production capacity to five million barrels per day by 2027 without the constraints of a group quota. The investment push announced on Sunday is designed to accelerate that target. Under its previous Opec agreement, the UAE was limited to producing 3.2 million bpd despite holding a capacity of 4.85 million bpd.
Make it in the Emirates
The contract awards were unveiled at the inaugural Make it With Adnoc forum, held on the eve of the Make it in the Emirates forum. It brought together more than 400 attendees, including government entities, engineering procurement and construction contractors and private-sector companies.
Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc's managing director and group chief executive, said the company was entering “a defining execution phase in its strategy, driven by scale, pace and a laser focus on delivery”.
“We invite partners who can move at the pace of the UAE's ambitions, match flawless execution with rock-steady reliability and demonstrate an unwavering focus on local value creation to join us in this new chapter,” he said.
“The importance of in-country value has been showcased through the recent events we've been going through,” Omar Al Nuaimi, Adnoc's acting chief commercial and ICV officer, told The National. “Our ability to continue operations was through all of the previous ICV efforts that have been conducted.”
At the centre of the push is a drive to deepen domestic supply chains, underpinned by a commitment to channel $60 billion into the UAE economy over the next five years through the ICV programme.
The Local+ initiative, which connects EPC contractors with over 70 qualified local manufacturers, mandates that those contractors procure directly from UAE suppliers and prioritise made-in-the-Emirates products across all projects.
War spurs localisation efforts
For manufacturers already operating in the UAE, the war has heightened the necessity to procure locally. Mazen Shehada, business development manager at Abu Dhabi Oilfield Services, said his company is extending inventory buffers for critical raw materials from three months to as long as two years.
“We cannot rely on a manufacturer in America, India or China for raw materials any more,” he said.
Mr Shehada gave resin, a core input in his manufacturing process for underground fuel storage tanks, as an example of a material disrupted during the conflict that now needs to be produced locally. Nearly 60 per cent to 70 per cent of materials used by UAE manufacturers are already sourced domestically, he said, but advanced components remain import-dependent.
Adnoc plans to build on the forum's momentum with a follow-on event, Adnoc Value Connect – Meet the Buyer, on May 5 and 6 at Make it in the Emirates, targeting more than 1,000 companies, including small and medium-sized enterprises.
Mr Al Nuaimi said the Dh200 billion programme goes beyond a pipeline announcement, with Adnoc committing to guaranteed offtake agreements tied to specific volumes and prices for locally manufactured goods.
“It's no longer about a vision written on paper,” Mr Shehada said. “Adnoc has told us exactly where the gaps are, committed to a volume and a price. For any investor globally, the uncertainty is not there.”
