As the world continues to pursue the clean energy transition, the prospect of a low-carbon future raises an important question for Middle East and North Africa (MENA) economies: how will the region’s hydrocarbon sector—historically a cornerstone of its industry and the lifeblood of its economies—adapt when oil prices undergo significant declines?
For decades, MENA’s NOCs have dominated the oil and gas industry. They have shaped global energy markets and powered economic growth. They collectively control over 52% of the world’s proven oil reserves and nearly 45% of its natural gas. Their revenues have fuelled economic development, funded infrastructure projects, and bolstered national budgets. They have also enabled states to exert influence on the world stage.
A significant decline in oil prices, however, poses a clear challenge to the revenue models of the region’s NOCs and to its economic and political stability. While Saudi Aramco’s position as the lowest-cost and lowest-emitting producer is secure and will offer some insulation as “the last producer standing” in a low-carbon world, all MENA NOCs are aware of the need to evolve. For these energy giants, securing their future influence is a matter not only of resources but of innovation and agile decision-making.
From resources to innovation
Aramco, QatarEnergy, ADNOC and Sonatrach are redefining their roles by transitioning from being hydrocarbon producers to being comprehensive energy producers. This pivot is driven not merely by the climate commitments of MENA states; it is also a strategic move to ensure long-term economic growth and maintain influence in a low-carbon future. NOCs are placing themselves and MENA economies at the centre of the global energy transition by embracing clean energy.
To achieve these goals, Aramco, QatarEnergy, ADNOC, and Sonatrach are leveraging their resources and expertise to advance clean energy projects, signalling the region’s commitment to a low-carbon future.
Aramco
The Kingdom’s energy giant is leading projects in blue ammonia, hydrogen and carbon capture. Its sustainability portfolio includes 25 companies covering these fields. In its 2024–26 capex plan, the company committed 10% of its budget to its ‘New Energies’ division, which is dedicated to the development of renewables, hydrogen, and CCS.
Aramco’s investments in blue hydrogen include, but are not limited to, a 50% stake in the Blue Hydrogen Industrial Gases Company and plans to produce 11mt/yr of blue ammonia by 2030. In collaboration with the US -based Air Products, Aramco operates Saudi Arabia’s first hydrogen fuelling station, which was inaugurated in 2019. The NOC is developing a CCS hub with a capacity of 9mt/yr, and which is expected to come into operation in 2027. The NOC’s majority owned subsidiary, SABIC, also operates a 500,000t/yr carbon capture project, and its Hawiyah Gas Processing Plant has captured 800,000t/yr since it was established a decade ago.
Aramco’s overarching goal is to become a leader across the clean energy technology supply chain, including critical minerals. Its latest move is to explore the viability of lithium extraction in Saudi Arabia. The global lithium industry needs diversified suppliers for the secure supply of electric vehicles and renewable energy systems.
QatarEnergy
Doha’s NOC is scaling up blue ammonia and hydrogen production with CCS capacities. Central to this effort is a 1.2mt/yr blue ammonia plant, the largest in the world. Further reinforcing its carbon management efforts, QatarEnergy’s LNG operations in Ras Laffan include a 4.3mt/yr carbon sequestration facility. The company aims to increase its CCS capacity by 400% by 2035, solidifying its position as a leader in sustainable energy innovation.
ADNOC
The UAE’s energy champion is driving forward its clean energy agenda by investing $15b in projects aimed at achieving net-zero emissions by 2045. These initiatives span hydrogen and ammonia production, both domestically and internationally, alongside expanding CCS capabilities, with the aim of reducing carbon intensity by 25% by 2030.
ADNOC is a key shareholder in Masdar, the UAE’s flagship clean energy developer, and plays a pivotal role in its green hydrogen business arm. Internationally, ADNOC is co-developing projects such as BP’s H2Teesside in the UK, targeting 2.5GW of green hydrogen by 2030, and holds a 35% stake in ExxonMobil’s Baytown Blue Hydrogen complex. Partnerships with global players such as Japan’s Jera, Mitsubishi Heavy Industries, Italy’s ENI, Azerbaijan’s SOCAR, and South Korea’s POSCO further underscore ADNOC’s commitment to scaling low-carbon hydrogen.Top of Form
Sonatrach
Algeria’s NOC is leveraging the country’s proximity to Europe to develop green hydrogen for export to the EU. The company’s extensive pipeline network enables it to develop green hydrogen at competitive costs. Sonatrach has earmarked $1b overall for low-carbon projects, including in hydrogen and solar photovoltaics, among others.
Pioneering a sustainable future
Looking ahead, the clean energy investment portfolios of these NOCs are reshaping MENA’s energy landscape. MENA’s NOCs are not only securing their roles in the global energy transition but also positioning the region as a leader in low-carbon technology deployment. This approach represents more than a shift in energy production. It marks a fundamental realignment of economic and geopolitical priorities, ensuring that MENA continues to play an influence role in the global energy markets in a decarbonised world.
Jessica Obeid is an energy engineer and policy consultant with a track record spanning more than 15 years. She is head of energy transition at SRMG Think.
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