UAE invests to meet 2027 crude oil production capacity goal

However, over the past 10 years, UAE actual production has averaged just less than 3 million bpd because of production cut agreements between OPEC and non-OPEC participating countries (collectively known as OPEC+), according to the EIA's Country Analysis Brief: United Arab Emirates. The UAE national oil company, the Abu Dhabi National Oil Company (ADNOC), has set a target to increase crude oil production capacity to 5 million bpd by 2027, moving up its earlier 2030 target by three years, according to the Middle East Economic Survey.

To achieve its 2027 goal, ADNOC has increased upstream exploration and development. ADNOC increased planned spending on capital expenditures to $150 billion from 2023 to 2027 and unveiled expansion plans for increasing production.

The UAE is also focused on increasing production capacity in new locations. In 2018 and 2019, the Abu Dhabi, Sharjah, and Ras Al Khaima emirates held several licensing rounds for exploration blocks that were offered for the first time to both domestic and international oil companies.

ADNOC has reported its official production capacity at 4.5 million bpd, according to the EIA's Energy Intelligence, which is about 0.5 million bpd higher than the EIA's 2023 estimate of 4.0 million bpd. However, considerable uncertainty surrounds ADNOC’s ability to sustain production at full capacity. Estimates from other sources such as Energy Intelligence and Rystad Energy are higher, placing the UAE’s production capacity closer to the range of 4.3 million bpd to 4.4 million bpd. Capacity expansion will allow for a significant increase in crude oil production. Should this production increase materialise, the EIA expects that most of that growth will be exported.

The UAE was the seventh-largest total liquid fuels producer in the world in 2022 and the third largest among OPEC countries. The UAE held an estimated 111 billion barrels of proved crude oil reserves at the beginning of 2023, up from 107 billion barrels in 2022.

The UAE joined OPEC in 1967 and is one of only two members, alongside Saudi Arabia, with notable spare crude oil production capacity to address potential supply shortfalls. Surplus production capacity refers to capacity that is available but is unused because of policy decisions either by individual members or the organisation. On 4 June 2023, OPEC+ announced that the group plans to extend its crude oil production targets for participating member countries to the end of 2024. In addition, crude oil production targets for the participating OPEC+ countries would also be adjusted starting in January 2024.

Unlike other member countries whose production quotas were reduced in June 2023, the UAE’s current target increased by 200 000 bpd. However, in the most recent OPEC+ meeting, on 30 November 2023, the UAE also agreed to make an additional voluntary production cut to its stated production targets for the first quarter of 2024 to assist OPEC+’s efforts to reduce global crude oil supply.

This change would, in effect, raise the UAE’s stated crude oil output target from 3.02 million bpd in 2023 to 3.06 million bpd between January 2024 and the end of March 2024. The UAE target would then increase to 3.22 million bpd for the rest of 2024, if the UAE chooses to comply with all agreements made in 2023 and if no further OPEC+ cuts are adopted in 2024.

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