The UAE’s oil giant, ADNOC, led by the president of the COP28 climate conference, is facing scrutiny for its substantial monthly expenditures on fossil fuels. According to a recent analysis by international NGO Global Witness, ADNOC is expected to spend over $1 billion each month throughout this decade on fossil fuel-related activities. This amount dwarfs its commitment to decarbonization projects during the same period.
ADNOC’s Ambitions and Disputes
ADNOC, which recently announced an ambitious net-zero target for 2045, has disputed the findings of Global Witness, asserting that the assumptions made in the analysis are inaccurate. This controversy comes just ahead of the COP28 climate summit, set to be hosted in Dubai from Nov. 30 to Dec. 12. The summit is deemed one of the most critical gatherings since the landmark Paris Agreement of 2015, where global leaders will convene to address the climate crisis.
The Dual Role of Sultan al-Jaber
Adding to the controversy is the fact that Sultan al-Jaber, the CEO of ADNOC, is also overseeing the COP28 climate conference. This dual role has raised concerns among civil society groups and lawmakers in the U.S. and EU, although some government ministers have defended his appointment.
Eye-Watering Expenditure on Fossil Fuels
Global Witness’ analysis, shared exclusively with CNBC, reveals that ADNOC is projected to spend an average of $1.14 billion per month on oil and gas production alone until 2030. This projection coincides with the year the United Nations has identified as the deadline to reduce global emissions by 45% to avert a climate catastrophe. Shockingly, ADNOC’s spending on fossil fuels is nearly seven times higher than its investment in “low-carbon solution” projects during the same period.
A Daunting Projection for 2050
Looking further ahead, ADNOC’s fossil fuel investments are expected to reach $387 billion by 2050. This projection is a cause for concern as burning fossil fuels remains a primary driver of the climate crisis.
ADNOC’s Response
ADNOC has responded to the analysis, stating that the capital expenditure program beyond its current five-year plan (2023 to 2027) is speculative and incorrect. In January, the company announced a $15 billion allocation for investment in “low-carbon solutions” by 2030, encompassing clean power, carbon capture and storage, and electrification projects.
Global Witness’ Methodology
Global Witness arrived at these projections by analyzing ADNOC’s forecasted capital expenditures related to oil and gas production, exploratory activities, and operational costs from 2023 to 2050. The data used was sourced from Rystad Energy’s UCube database, a widely recognized source among major oil and gas companies and international bodies.
A Stark Reality
Patrick Galey, senior investigator at Global Witness, criticized fossil fuel companies for their incongruous actions, stating that they often tout their green initiatives while continuing to invest substantially in polluting oil and gas. The controversy surrounding Sultan al-Jaber’s dual role as both a COP28 president and CEO of a fossil fuel giant highlights the stark contrast between stated intentions and actions.
The Role of the UNFCCC
The United Nations Framework Convention on Climate Change (UNFCCC) did not provide immediate comment on Global Witness’ analysis. The UNFCCC’s Conference of the Parties (COP) is the highest decision-making body responsible for addressing climate issues.
COP28’s Main Priority
Sultan al-Jaber, the head of ADNOC, has emphasized that COP28’s primary objective is to maintain the fight against global warming and limit the increase in global temperatures to 1.5 degrees Celsius. This goal aligns with the Paris Agreement, which aims to prevent the planet from reaching the critical temperature threshold where small changes could trigger catastrophic shifts in the Earth’s climate.
IEA’s Warning
The International Energy Agency (IEA) has warned that new developments in oil, gas, or coal are incompatible with the goal of limiting global warming to 1.5 degrees Celsius.
ADNOC’s Response to Rising Energy Demand
In response to inquiries from CNBC, an ADNOC spokesperson acknowledged the rising global energy demand due to population growth. The spokesperson emphasized that, according to energy transition scenarios, some level of oil and gas would be required in the future. ADNOC is committed to investing in less carbon-intensive sources of oil and gas while simultaneously accelerating renewable and low-carbon energy projects. They also aim to reduce their carbon intensity by 25% and target near-zero methane emissions by 2030.
The Broader Fossil Fuel Spending Trend
Global Witness and Oil Change International reported in April last year that 20 of the world’s largest oil and gas companies were projected to spend $932 billion by the end of the decade on new fossil fuel development. At that time, Russian state company Gazprom was expected to allocate the most funds to such projects, followed by U.S. oil majors ExxonMobil and Chevron.
