Middle East Oil & Gas: UAE Pushes Ahead with Unconventional Ambitions

Yesterday saw the FID of ADNOC's Ruwais Diyab project, marking the country's first unconventional development and supporting broader gas self-sufficiency ambitions. At peak plateau, we believe this could meet 10% of the UAE's gas demand by 2030 and help feed rising domestic demand and LNG exports. While capex is not disclosed, our previous analysis suggests a cost of supply that is in the mid-single-digit $/mmbtu and well below LNG import parity today. Moreover, this FID paves the way for progress on unconventional oil developments where recent well results have been encouraging and could offer the UAE increased oil flexibility in a post-OPEC world. The Ruwais Diyab formation holds dry gas in tight carbonate deposits and is north of the Shilaif Formation where the country's oil-rich unconventional resources sit. Early production was achieved in 2020, two years after the concession was first awarded, with recent years focused on improving drilling and completion efficiencies, mirroring