Abu Dhabi State Oil Company will acquire a 30% stake in the Azerbaijan Caspian Sea Abu Sheron natural gas and condensate fields as part of its strategic growth plan and entry into the international natural gas market. According to the agreement, Azerbaijan's state-owned oil company Socar and France's TotalEnergies will each hold 35% of the natural gas field's shares.

Total Energy previously held a 50% stake in Absheron with Socar. We believe that the strategic partnership with Socar and Total Energy will unleash the potential of the Caspian Sea region in the coming decades and complement broader energy cooperation between the United Arab Emirates and Azerbaijan, which will accelerate the growth of the global renewable energy sector as both countries have taken bold steps towards a low-carbon future, "said Musabbeh Al Kaabi, Executive Director of ADNOC's low-carbon solutions and international growth.

According to Wood Mackenzie, an energy consulting firm, the Middle East is expected to spend up to $120 billion by 2030 to increase natural gas production by more than 19%. It stated in a report in May that by the end of this century, the region's natural gas production will increase from the current 72 bcfd to 86 billion standard cubic feet per day.

The export of liquefied natural gas surged in 2022, especially in the Gulf region, as European countries rushed to obtain alternative energy and reduce their dependence on Russian natural gas.

ADNOC Gas is a division of ADNOC, which holds 95% of the natural gas reserves in the United Arab Emirates and is estimated to be the seventh largest natural gas reserves in the world. It also supplies over 60% of the country's natural gas demand. Azerbaijan's partnership will enable ADNOC to establish a significant footprint in a region with abundant natural resources and huge growth potential, and promote access to the "attractive international natural gas growth markets in Europe and Central Asia".

The company stated that its investment in the Abuxilon gas field will further consolidate ADNOC's position as a reliable supplier of low-carbon energy. The agreement is also based on the existing renewable energy capacity agreement between the United Arab Emirates and Azerbaijan. This transaction supplements ADNOC's investment through Abu Dhabi's clean energy company Masdar, and collaborates with Socar to develop 10 gigawatts of solar, onshore and offshore wind, and green hydrogen renewable energy, supporting the common energy transformation agenda of the two countries.

In August 2022, Masdar achieved financial settlement at the 230 MW Garadagh solar power plant in Azerbaijan. The factory is expected to generate 500 million kilowatt hours of electricity annually, meeting the needs of over 110000 households. The favorable investment environment in Azerbaijan provides favorable conditions for foreign investors in the energy sector, "said Rovshan Najaf, President of Socar. The Abu Sheron Agreement reaffirmed Azerbaijan's position as a reliable partner in the energy sector.

According to Nicholas Traz, President of Exploration and Production at Total Energy, the first phase of production at the Abuchelon gas field began in early July. The first batch of natural gas from Abuxilong was delivered in early July. The gas field provides enormous potential for further development to meet the growing demand for natural gas. As part of the expanding partnership, ADNOC and Socar have also signed a preliminary agreement to evaluate potential areas of cooperation in renewable energy, low-carbon solutions, and upstream projects in the United Arab Emirates, Azerbaijan, and internationally.

Azerbaijan mainly relies on natural gas to meet its energy needs, and plans to increase its renewable energy installed capacity to 30% by 2030 to achieve economic diversification and reduce greenhouse gas emissions. The country is developing several clean energy projects. In January 2022, Acwa Power in Saudi Arabia and the Ministry of Energy in Azerbaijan began construction of a $300 million, 240 megawatt wind power plant.Editor/XingWentao