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Adnoc strives to build long-term upstream potential

13 October 2025

 

Between 2023 and 2024, Abu Dhabi National Oil Company (Adnoc Group) spent an estimated $37bn on projects considered vital to achieving its upstream goals: reaching an oil production capacity of 5 million barrels a day (b/d) by 2027 and attaining gas self-sufficiency by the end of the decade.

The state energy enterprise spent more than $22.5bn in 2023 alone, making it the biggest year on record for oil and gas project spending in the UAE. The Hail and Ghasha sour gas development project, which accounted for approximately $17bn, holds the distinction of being the single-largest contract award in history in the country’s hydrocarbons industry.

A decline in capital expenditure (capex) in 2025, following two years of prolific project spending, is therefore in line with expectations. While there has been a noticeable dip in capex on engineering, procurement and construction (EPC) contract awards for upstream projects this year, Adnoc has still spent over $8bn year-to-date.

This year, Adnoc’s upstream spending appears to be focused on surpassing its immediate oil and gas production targets – which are already considered within reach – and on building long-term output capacity beyond 2030.

Adnoc Group subsidiary Adnoc Offshore awarded contracts totalling $7.5bn for three main EPC packages under a project to boost oil production at the Lower Zakum offshore concession in Abu Dhabi. Spanish contractor Tecnicas Reunidas and Abu Dhabi-based firms NMDC Energy and Target Engineering Construction Company were selected in February to execute EPC works on the three main packages of the Lower Zakum Long-Term Development Plan (LTDP-1) project.

The Lower Zakum hydrocarbons zone is located 65 kilometres northwest of Abu Dhabi in the Gulf’s waters. Adnoc Offshore holds the majority 60% stake in the Lower Zakum asset. Other stakeholders in the concession include an Indian consortium led by ONGC Videsh (10%), Japan’s Inpex Corporation (10%), China National Petroleum Corporation (10%), Italy’s Eni (5%) and France’s TotalEnergies (5%).

Adnoc Offshore’s broader long-term objective is to raise the asset’s production capacity to 520,000 b/d by 2027 and sustain that level through 2034.

Vital projects in queue

Looking ahead, another Adnoc Group subsidiary, Adnoc Sour Gas, has entered the decision-making phase for its project to increase the Shah gas plant’s sour gas processing capacity to 1.85 billion cubic feet a day (cf/d), following the receipt of commercial bids from contractors in July.

Based on an initial evaluation of bids, China Petroleum Engineering & Construction Company (CPECC) has emerged as the lowest bidder for the Shah gas plant expansion project.

Meanwhile, Adnoc Offshore is progressing with three additional key projects aimed at further expanding its oil and gas production capacity.

The first is a major project to increase oil production from the Satah Al-Razboot (Sarb) field, located within the Sarb and Umm Lulu concession in the Gulf.

Contractors including US-based McDermott, China Offshore Oil Engineering Company (COOEC), UAE/Saudi-based Lamprell and Abu Dhabi’s NMDC Energy submitted bids for the two main EPC packages of the Sarb field development in September. Adnoc Offshore is believed to be nearing a decision, with the contract award expected by year-end.

Adnoc Offshore is also advancing a project to boost gas and condensate production from the Umm Shaif field. The primary goal of the Umm Shaif gas cap and surface pressure boosting project is to increase gas production by 550 million cf/d and raise associated condensate output by 50 million b/d. Adnoc Offshore plans to feed approximately 520 million cf/d of the additional gas output into Adnoc Group’s sales gas network.

Adnoc Offshore is in the tendering phase for three EPC packages of the Umm Shaif gas cap development project – two offshore packages and one onshore – with contractors currently preparing technical bids.

After awarding EPC contracts worth over $1.3bn last year for two key projects as part of its campaign to increase oil production capacity at the Upper Zakum offshore field to 1.2 million b/d, Adnoc Offshore is now moving forward with the next expansion phase, which will boost the asset’s capacity to 1.5 million b/d.

Located 84 kilometres offshore from Abu Dhabi, Upper Zakum is the world’s second-largest offshore oil field and the fourth-largest overall. Contractors are currently preparing technical bids for the UZ1.5MMBD project, with the EPC scope reportedly divided into three packages.

Separately, Adnoc Gas – the natural gas processing arm of Adnoc Group – is working towards a final investment decision (FID) on a project to process gas from the Bab onshore field in Abu Dhabi in 2026.

Adnoc Gas is nearing the issuance of the main tender for the Bab gas cap development project, having completed early engagement with interested contractors.

Adnoc Gas is close to issuing the main tender for the Bab gas cap development project, having completed an early engagement process with contractors interested in participating. EPC works on the Bab gas cap project – which will add 1.85 billion cf/d of gas output – are scheduled for completion in 2029.

MEED's November 2025 special report on the UAE also includes:

> GOVERNMENT: Public spending ties the UAE closer together
> ECONOMY: UAE growth expansion beats expectations
> BANKING: Stability is the watchword for UAE lenders
> DOWNSTREAM: Taziz fulfils Abu Dhabi’s chemical ambitions at pace
> POWER: UAE power sector hits record $8.9bn in contracts
> CONSTRUCTION: UAE construction faces delivery pressures
> TRANSPORT: $70bn infrastructure schemes underpin UAE economic expansion

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Indrajit Sen

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