The ADNOC Structure.

After restructuring in late 1998 and early 1999, ADNOC has eight directorates functioning as autonomous divisions. Of these, five operating directorates were created in October 1998, with each in charge of a sector and subsidiary companies. Now ADNOC's structure is as follows:

The E&P Directorate is in charge of the upstream sector, including ADNOC's exploration work and the E&P joint ventures: onshore ADCO (the largest oil producer), offshore ADMA-OPCO (the third largest oil producer), ZADCO (the second oil producer), and the smaller producers offshore. (See their profiles in Gas Market Trends of this week).

The Gas Processing Directorate is in charge of Abu Dhabi Gas Industries Co. (Gasco) and of the LNG-exporting joint venture ADGAS. Gasco is in charge of the gas processing plants and gas pipelines. On April 23, 2001, ADNOC's fully-owned Abu Dhabi Gas Processing Co. (Atheer), set up in early 1999, was merged into Gasco in order to streamline ADNOC's onshore gas operations. Now Gasco is owned 68% by ADN0C, 15% by Shell, 15% by Total and 2% by Partex. Gasco handles all of ADNOC's gas projects.

The crude oil/products Marketing and Refining Directorate is in charge of the Abu Dhabi Refining Co. (Takreer) and the autonomous Abu Dhabi National Oil Co. for Distribution (ADNOC-FOD). ADNOC Marketing & Refining is responsible for selling to the international markets. It sells ADNOC's equity share of crude oil and condensate production, natural gas liquids and sulphur, together with the refined oil products processed by Takreer. It also sells oil products to ADNOC-FOD for the domestic market and the other countries (see Downstream Trends of this week). It co-ordinates the activities of Abu Dhabi National Tanker Co. (ADNATCO) and the National Gas Shipping Co. (NGSCO) all of which are wholly-owned subsidiaries of ADNOC. Murban is exported from Jebel Dhanna. The offshore lower Zakum and UmmShaif crudes are exported from Das Island. Offshore Upper Zakum crude is exported from Zirku Island.

The Chemicals and Petrochemicals Directorate is in charge of the Borouge olefins venture (60% ADNOC/40% Borealis) and the fertilisers producer Fertil, which are both expanding (see Downstream Trends).

The Services Directorate is in charge of National Drilling Co. (NDC), Abu Dhabi Drilling Chemicals and Products (ADDCAP), Abu Dhabi Petroleum Ports Operating Co. (ADPPOC), and National Marine Service Co. (NMS). National Petroleum Construction Co. (NPCC), a highly successful contractor 30% owned by the Athens-based Lebanese firm CCC, has been transferred to General Holding Corp. (GHC) of the Economics Department (local ministry) and it is being restructured before the state's 70% stake is privatised.

The Marine Transportation Directorate is in charge of Abu Dhabi National Tanker Co. (ADNATCO) and National Gas Shipping Co. (NGSCO).

The Directorate of Finance.

The Directorate of Human Resources.

Hill International of the US was in August 2002 appointed as construction manager and supervisor for four ADNOC projects: (1) a residential complex at the gas processing centre of Habshan; (2) housing facilities at Ruwais; (3) a jetty at Ruwais; (4) an ADNOC Petroleum Institute, a $70-82m petroleum engineering college built at Khalifa B City and by the Colorado School of Mines of the US and completed in 2004.

The Reserves: For years Abu Dhabi's proven recoverable oil reserves have been estimated at 92.2 bn barrels. There are more than 200 bn barrels of oil in place in the emirate yet to be appraised for future development. To compare, the proven reserves of the other UAE emirates are less than 6 bn barrels.

Abu Dhabi's recoverable reserves of natural gas are officially estimated at 190 TCF (5.7 TCM), proven by data for both non-associated and associated gas. Experts at ADNOC say the emirate's recoverable gas reserves could be larger. In early 1990 then UAE Oil Minister Otaiba told the monthly magazine Dira' ul-Watan the UAE's gas reserves exceeded 354 TCF. He was referring mainly to Abu Dhabi, as the oil and gas reserves of the other emirates do not even account for 5% of the UAE's total. Abu Dhabi's large non-associated gas fields are offshore. But most of the non-associated gas has high sulphur content, with the cost of extracting and processing it being high (see Gas Market Trends).

Apart from the priority of expanding Abu Dhabi's oil production capacity, development of the gas sector is the focus as local demand is expected to rise rapidly in the coming years. ADNOC has launched a $10,000m plan to develop sour gas in ADCO's onshore Hail, Shah and Bab oilfields to produce 3,000 MCF/day. By 2010, when local demand could have reached almost 10,000 MCF/d, Abu Dhabi's onshore and offshore gas production would have exceeded 8,000 MCF/d, with the deficit to be met by imports from Qatar through the Dolphin project (see Part 3). Abu Dhabi's onshore and offshore gas production capacity has reached more than 6,500 MCF/d, with a big part reinjected into the oilfields. By mid-1996, the gas production capacity had exceeded 4,000 MCF/d, from a little over 2,000 MCF/d in 1994 and about 1,800 MCF/d in 1992.

Mature Oilfields: Most of Abu Dhabi's oilfields are 34 years old. So the focus is on new, more advanced systems for enhanced oil recovery (EOR) which are expensive. Water levels in the oil reservoirs have risen, in some cases to more than 20%, and reservoir pressure is falling. Equally important is the need to replace production facilities, some of which being more than 24 years old, as their maintenance has become a major issue. The second main offshore oil producer, Abu Dhabi Marine Operating Co. (ADMA-OPCO), is to replace its crude oil and water supply pipelines. Its project will involve installing several new lines (see Gas Market Trends).

ADNOC is the sole company in charge of the petroleum sector in Abu Dhabi. Its three main oil producing units are consortia: ADCO, ADMA-OPCO and ZADCO. The three groups include the biggest multinationals. The smaller producers in Abu Dhabi involve important Japanese firms (see profiles in Gas Market Trends).

During the first Gulf crisis, from Iraq's invasion of Kuwait in August 1990 to the US-led war against Saddam's Iraq in early 1991, Abu Dhabi's oil production was maximised. At one time it exceeded 2.3m b/d. Dubai's production then was about 420,000 b/d (but now it is less than 85,000 b/d). Saudi Arabia also produced at a maximum rate, averaging 9m b/d, at the time.