The Middle East and North Africa (MENA) region has long been at the center of the global energy universe, with national oil companies (NOCs) and their predecessors charged with developing vast oil and gas resources for nearly a century. While the region will undoubtedly remain a dominant player in traditional oil and gas spheres for the foreseeable future, several key countries and NOCs are strategically positioning themselves to become key hubs and global leaders in new emerging energy markets. The result is an increasing divergence between the strategies of NOCs in the more forward-leaning countries, led by the UAE and Saudi Arabia, and, on a more regional level, Oman, and the more traditional petrostates, such as Kuwait and Qatar, where NOCs are primary focused on delivering operational results and revenues to the state. 

Diverging approach: UAE, Saudi Arabia and Oman

The UAE and Saudi Arabia have emerged as strategic players in the global energy transition, with both ADNOC and Saudi Aramco recognizing that the future of energy will require more than just oil and gas.

The UAE has firmly established itself as a global leader in the energy transition by hosting COP28 in 2023 and forging the UAE Consensus, which marked a historic commitment to “transitioning away from fossil fuels in the energy systems in a just, orderly and equitable manner” – the first such pledge at any COP summit. ADNOC, along with Masdar – the UAE’s national champion in renewable energy – has made significant domestic and international investments in solar, battery storage and hydrogen, especially in developing markets. ADNOC recently launched XRG, an $80 billion investment vehicle that is targeting gas, petrochemical and low-carbon projects worldwide. Such moves further strengthen the UAE’s position at the forefront of the rapidly evolving new energy landscape.

Saudi Arabia is making big strides in diversifying its economy beyond oil as the country nears the 10-year mark in its landmark ‘Vision 2030’ plan. With substantial investments in renewable energy, the kingdom aims to generate 50% of its domestic power from renewables by 2030 while positioning itself as a global leader in hydrogen, carbon capture and storage (CCS), and other new energy segments. At the same time, Aramco will maintain its dominant position in the traditional oil and gas sector, ensuring robust revenues to fuel Saudi Arabia’s ambitious and far-reaching modernization and economic diversification efforts.

Oman, with its relatively smaller economy and more limited oil and gas reserves, has adopted a more traditional bid-round approach to attract partners and investors in the new energy space. The country seeks to develop its vast solar and onshore wind potential to diversify its domestic energy mix and help establish itself as a green hydrogen export hub from 2030. Oman’s NOCs, led by Energy Development Oman and, to a lesser extent, OQ, are tasked with both maximizing existing oil and gas resources and driving the country’s energy transition efforts. This will help to position Oman as a key regional player in the emerging green hydrogen export market and evolving regional landscape. 

More traditional approach: Kuwait, Qatar and others

In contrast, countries such as Kuwait, Qatar and others, especially in North Africa, remain largely focused on developing traditional oil and gas resources to maximize state revenues for the coming decades. Any efforts on energy transition and net-zero commitments are largely centered on optimizing operations to maintain cost and emissions advantages in the long term.

Qatar, for example, views natural gas as a crucial bridge to lower-carbon energy, particularly as a cleaner alternative to coal and oil. QatarEnergy, which is already a leading global LNG exporter, has recently committed to further increase its LNG-export capacity and expand its international investments in both the upstream and liquefaction segments. Such strategic moves will help Qatar to remain a major player in the global energy markets for the foreseeable future.

Striking a balance: MENA and the energy transition

The MENA region is striking a careful balance between maintaining its dominant oil and gas position and embracing the energy transition amid an evolving global energy landscape. Traditional oil and gas revenues will inevitably come under increasing pressure as a result of an accelerated energy transition, driven by climate targets, advancing renewable technologies and market demands.

However, the region’s unique endowment of both traditional oil and gas resources and renewable energy potential – particularly solar and wind – coupled with its financial strength, human talent and strategic location, positions its NOCs at the forefront to lead in traditional oil and gas as well as new energy markets. The energy transition will take time, but increasing investments in renewables, hydrogen, CCS and other new-energy sectors will ensure that many of the countries and NOCs in the MENA region will remain key players in the global energy landscape for decades to come.

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