Rystad whitepaper highlights Middle East NOCs' resilience

A new whitepaper from Rystad Energy highlights the plans of the Middle East NOCs to ramp up production and upstream investments, as well as their resilience in the energy transition and different oil demand scenarios

In the NOC/INOC Corporate Strategy Benchmarking whitepaper, Volume 1: Oil & Gas, Rystad Energy notes that Aramco, with its focus on enhancing production at mature oilfields and ramping up gas production, will continue to see upstream investments rise, recording capex of US$29bn in the first nine months of 2024 alone. Rystad forecasts QatarEnergy will invest between US$14-15bn per year over the next few years as it continues to invest heavily in the North Field gas field and expanding LNG capacity, while ADNOC’s expenditure, which reached US$5.7bn last year, is forecast to increase given its target of 5mn bpd production capacity by 2027. The Hail & Ghasha offshore development project, which is set to produce more than 1.5bn standard cubic feet per day (bscfd) of gas before the end of the decade, and the Ruwais LNG project are key ADNOC focuses.

Rystad notes the resilience of the Middle East NOCs in different energy demand scenarios, particularly given their focus on LNG, a key energy transition fuel. It adds that Aramco and ADNOC’s low-cost portfolio and short-cycle return on investments are key factors ensuring their competitiveness.

QatarEnergy is heavily expanding its LNG production, with an eye on longterm demand from Asia, and is forecast to operate nearly 120mn tonnes per annum (Mtpa) of LNG capacity by 2035, with its North Field projects targeting 126 Mtpa by 2027. Qatar could account for 20% of global supply after 2030, Rystad predicts, with continuing incremental expansion, its low breakeven and existing infrastructure ensuring dominance in the LNG market.

ADNOC's LNG capacity is set to expand significantly with the Ruwais LNG project (9.6 Mtpa) starting up by 2028, which will more than double ADNOC's current LNG production capacity, while Aramco has acquired a 49% stake in LNG-focused MidOcean, which has interests in a portfolio of Australian integrated LNG projects, and a 35% stake in Peru LNG.

The whitepaper also notes the focus of the Middle East NOCs on international expansion, with QatarEnergy acquiring multiple blocks in Namibia’s Orange Basin from TotalEnergies and Chevron, and exploration assets in Egypt from Chevron and ExxonMobil; and ADNOC acquiring gas and LNG assets in Africa and the Caucasus, including a 10% stake in Mozambique LNG, and a 30% stake in Azerbaijan’s Absheron gas field from Socar and TotalEnergies. While Aramco has expanded its international LNG portfolio, with its stake in MidOcean as well as acquiring a 25% stake in Port Arthur LNG in the US from Sempra.