Adnoc diverts medium sour Upper Zakum crude to Ruwais

Abu Dhabi's state-owned oil firm Adnoc began diverting its medium sour crude grade Upper Zakum to its Ruwais refinery "for economical reasons" at the end of last year, a source with knowledge of the matter told Argus.

The move is an integral part of the company's $3.5bn crude flexibility project (CFP), which is designed to free up more of the UAE's lighter, sweeter Murban grade for export.

"[Adnoc] began, since a few months, refining quantities from Upper Zakum instead of Murban at the Ruwais refinery," the source said. "This is the crude flexibility project, to process medium grades, for economical reasons," the source added. "Customers generally prefer more Murban and the grade is more profitable [for Adnoc]."

Adnoc conducted test trials on refining Upper Kazum last summer using small amounts. The process began in earnest towards the end of 2023 when the company finalised and commissioned the CFP, but "volumes for now are unstable," the source said.

Last month Adnoc revised higher the projected volumes of Murban available for export from June onwards. Its export forecast set March 2025 at a high of 1.661mn b/d, up from 1.602mn b/d for April this year. Adnoc exported 1.1mn b/d in 2023, down from 1.13mn b/d in 2022, according to data analytics firm Kpler.

The company has the capacity to produce more than 2mn b/d of Murban from its onshore fields. It mainly comes from the massive Adco concession, which accounts for around 43pc of the UAE's total crude capacity.

The CFP, a multi-year project, involved upgrading the 417,000 b/d Ruwais West refinery to run on heavier grades and not strictly domestic ones either. Previously, Ruwais West's slate was lighter crudes, primarily Murban, domestic condensate and small imported volumes of similar quality grades. The 140,000 b/d Ruwais East refinery also runs on Murban, which meant before the CFP was commissioned up to 557,000 b/d of Abu Dhabi's premium crude grade was being refined domestically instead of being exported.

Upper Zakum shipments to Ruwais stood at 366,000 b/d in March, or 40pc of the grade's 912,000 b/d of exports for the month, according to Kpler, compared with 152,000 b/d in February and 94,000 b/d in January.

By Bachar Halabi