Participants of the 20th annual Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) expected a recovery in the oil industry’s fortunes next year. LUKOIL wasn’t waiting on the sidelines.

Olga Mikhaylova, Abu Dhabi, UAE

Аt this year’s ADIPEC, which took place in Abu Dhabi on November 13-16, H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Abu Dhabi National Oil Company (ADNOC) Group CEO, confirmed ADNOC’s intention to issue the first-ever IPO for one of its subsidiary companies in his keynote address.

The company in question was ADNOC Distribution, which would unlock value for the ADNOC Group in accordance with its 2030 strategy. H.E. Dr. Al Jaber also highlighted unprecedented interest in the renewal of Abu Dhabi’s offshore concessions and pointed to further diversification and expansion of ADNOC’s downstream operations.

The forum’s official opening also featured keynote speeches from H.E. Suhail Mohammad Faraj Al Mazrouei, UAE Minister of Energy, and H.E. Mohammed Barkindo, OPEC’s Secretary General.

ADIPEC 2017 came at a time of cautious optimism among oil and gas producers. In the days before ADIPEC, global oil prices topped $60 per barrel for the first time in more than two years. Meanwhile the industry is also benefiting from sustained and significant efforts to improve operational efficiencies and diversify operations as it adjusts to a changing energy landscape.

“I said earlier this year that I am optimistic about the second half, and today I am optimistic about the whole of 2018. I think it is going to be a very strong recovery year, and we will see more investments coming to the region,” said H.E. Al Mazrouei.

ADIPEC’s opening day also featured two Global Business Leader sessions. One of them, titled Forging Ties – Fostering Relationships and Creating Business Models for Success, featured LUKOIL President Vagit Alekperov, Musabbeh Al Kaabi (Mubadala), Jose Antonio Gonzalez Anaya (PEMEX), Alexander Medvedev (Gazprom) and Dr Rainer Seele (OMV).

Mr. Alekperov pointed out that the company possesses a portfolio of unique assets and that its reserves amount to 20 billion barrels. Each year LUKOIL’s reserves grow by more than its production, providing a strong platform for future development. The company is highly active on the global market and its financial strength has made it a major partner to the national oil companies of Mexico, Iran, Iraq and other countries.

When asked about a possible future energy balance, Mr. Alekperov noted that different types of fuels complement each other, making today’s situation comfortable for both producers and consumers. “I would not make some revolutionary steps in favour of any particular fuel,” he said. “Coal, hydrocarbons, alternative energy – they all have a place. Every region is unique and needs a particular approach. We often see that political goals are dominating over economic ones in this sphere. The forced encouragement of alternative energy could bring serious problems, like in Denmark and Norway, where demand for electric vehicles dropped by 60% after state subsidies ended.”

Thanks to its participation in a new excessprofits tax being introduced in Russia, LUKOIL plans to invest in unconventional oil production. In the coming years the company will drill around 30 thousand economically efficient wells at Bazhenov formation in Western Siberia.

“In Western Siberia there are unique formations that contain enormous oil reserves,” added Mr. Alekperov. “They were discovered at the end of the 1970s. It’s not a shale; it’s kerogen, but very tight. The future of the Russian oil industry depends on the creation, selection and implementation of new technologies. Across [LUKOIL’s] fields alone, unconventional reserves amount up to 20 billion barrels, and we have to develop them effectively. But we need appropriate legislation that will encourage working with unconventional reserves. Soon this legislation will be introduced in Russia. That’s why we are optimistic about the future of oil production in our country.”

ADIPEC 2017 brought together more than 2,200 exhibiting companies, 27 country pavilions, 900 speakers, 10,000 delegates, and 100,000 attendees from more than 125 countries.

ABOUT ADIPEC

Held under the patronage of the President of the United Arab Emirates, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, and organised by the Global Energy division of dmg events, ADIPEC is the global meeting point for oil and gas professionals. Standing as one of the world’s top energy events, and the largest in the Middle East and North Africa, ADIPEC is a knowledge-sharing platform that enables industry experts to exchange ideas and information that shape the future of the energy sector. The 20th edition of ADIPEC will take place from 13- 16 November, at the Abu Dhabi National Exhibition Centre (ADNEC). ADIPEC 2017 will be hosted by the Abu Dhabi National Oil Company (ADNOC) and supported by the UAE Ministry of Energy, Masdar, the Abu Dhabi Chamber, the Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi), Abu Dhabi Ports and the Department of Education and Knowledge. dmg Global Energy is committed to helping the growing international energy community.