The Middle East and North Africa (MENA) region has long been a powerhouse in the global energy sector, with national oil companies (NOCs) developing vast oil and gas reserves for nearly a century. While the region is expected to remain a major player in traditional energy markets for years to come, some key countries and NOCs are taking bold steps to lead in emerging energy markets. This shift is creating a growing divide between forward-thinking nations like the UAE, Saudi Arabia, and Oman, and more traditional petrostates such as Kuwait and Qatar.
UAE, Saudi Arabia, and Oman: Leading the Charge in Energy Transition
The UAE and Saudi Arabia have positioned themselves as leaders in the global energy transition, recognizing that the future of energy goes beyond just oil and gas. Both ADNOC (Abu Dhabi National Oil Company) and Saudi Aramco are investing heavily in renewable energy, including solar, hydrogen, and battery storage, to stay at the forefront of this change.
The UAE has solidified its role as a global leader by hosting COP28 in 2023. At this summit, it made a historic commitment to transition away from fossil fuels “in a just, orderly, and equitable manner,” marking the first pledge of its kind at any COP conference. ADNOC, along with Masdar, the UAE’s renewable energy champion, has invested significantly in solar, hydrogen, and battery storage both domestically and in developing markets. ADNOC also launched XRG, an $80 billion investment fund focused on gas, petrochemicals, and low-carbon projects globally.
Meanwhile, Saudi Arabia is pushing its “Vision 2030” plan, which aims to diversify the economy beyond oil. As the kingdom nears the 10-year mark of this ambitious plan, it is focusing on generating 50% of its power from renewables by 2030. Saudi Arabia is also aiming to become a global leader in hydrogen and carbon capture and storage (CCS). However, Saudi Aramco continues to maintain its leadership in traditional oil and gas, ensuring strong revenues to fund the country’s economic transformation.
Oman, with its smaller economy and more limited oil reserves, has taken a more traditional approach by inviting partners and investors into its new energy markets. The country is focused on harnessing its solar and wind potential to diversify its energy mix. Oman aims to become a key green hydrogen exporter by 2030, while its NOCs, including Energy Development Oman, are tasked with both maximizing oil and gas resources and supporting the nation’s energy transition.
Kuwait, Qatar, and Traditional Oil-Dependent Nations
In contrast, nations like Kuwait, Qatar, and some North African countries remain focused on their traditional oil and gas industries to maximize state revenues. Their efforts toward energy transition are primarily aimed at optimizing operations to reduce costs and emissions over the long term.
For instance, Qatar views natural gas as a critical bridge to lower-carbon energy, particularly as a cleaner alternative to coal and oil. QatarEnergy, the country’s leading LNG exporter, has committed to increasing its LNG-export capacity and expanding investments in both upstream and liquefaction projects. These moves ensure Qatar’s continued dominance in global energy markets for the foreseeable future.
MENA’s Balancing Act: Traditional Energy and Transition
The MENA region is navigating a delicate balance between maintaining its traditional oil and gas role and embracing the energy transition. While traditional energy revenues are under pressure due to climate targets and advancing renewable technologies, the region’s vast reserves of oil, gas, and renewable energy resources — especially solar and wind — provide a strong foundation for future growth.
MENA’s unique combination of financial strength, human talent, and strategic location makes it well-positioned to lead in both traditional and new energy markets. While the energy transition will take time, continued investments in renewables, hydrogen, CCS, and other emerging sectors will help the region’s NOCs remain central players in the global energy landscape for decades to come.
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