RIYADH, Saudi Arabia – The two largest sovereign oil companies in the Middle East have joined forces to explore opportunities in the natural gas and liquefied natural gas sectors.
The two energy giants which dominate oil production in the Arabian Gulf announced their tie-up on Monday.
Abu Dhabi National Oil Company has entered into the agreement with Saudi Aramco, the world's largest crude exporter.
For both companies it is a shift away from the traditional oil sector into natural gas and LNG.
The deal has been sealed by Dr Sultan Al Jaber, the UAE Minister of State and Adnoc Group CEO, and Amin Nasser, Aramco president and CEO. The signing took place on Monday.
The UAE has been moving to gas in recent years while it ratchets up its oil exports.
This month, Abu Dhabi's Supreme Petroleum Council approved a five-year capital expenditure plan of $132 billion to increase capacity and unlock sour gas caps, in addition to developing and acquiring downstream capabilities in the UAE and overseas.
Last week Adnoc, which currently produces 3.1% of proven reserves of natural gas, said it had discovered a reserve of 15 trillion cubic feet of gas in existing and untapped blocks.
According to the current BP Statistical Review of World Energy, the new discoveries will add 7.1% to existing gas reserves.