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Accession Day 2004 - Oil and Gas Industry

posted on 05/08/2004: 1634 views

The UAE Oil and Gas industry made significant strides during this year and is set to achieve even greater successes in the years to come. One of these notable successes is the fact that the oil sector continued its growth for the third year running to reach record levels in 2003 as a result of improvement in global oil prices.

But the most significant development this year , however, was the re-formation of the Supreme Petroleum Council - a move widely seen as a major step towards evolving new strategies aimed at augmenting the pivotal role that the oil and gas sector has continued to play in the country's development.

The re-formation of the Supreme Petroleum Council was decreed by H.H Sheikh Khalifa bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces. According to Article (1) of the decree No. 12 for 2004, issued on June 29th, the Supreme Petroleum Council will include in its membership Sheikh Sultan bin Zayed Al Nahyan, Sheikh Mohammed bin Zayed Al Nahyan, Sheikh Mansour bin Zayed Al Nahyan, Sheikh Hamed bin Zayed Al Nahyan, Mohammed Habroush Al Suweidi and Yousef Omeir bin Yousef as member and Secretary General. Other members of the council include Joua'an Salem Al Dhaheri, Khalifa Mohammed Khalifa Al Kindi and Abdullah Nasser Al Suweidi.

The decree came into effect from the date of its issue on June 29. The re-formation of the council was in line with the vision of President H.H Sheikh Zayed bin Sultan Al Nahyan, who envisaged the UAE oil wealth as an endowment from God for present and future UAE generations, hence the need to exploit it in a judicious and scientific manner.

The UAE's proven oil reserve currently stands at 98 billion barrels. Proven recoverable reserves of natural gas are estimated at around six trillion cubic metres. With this enormous oil wealth - the third largest reserve in the world - the UAE under the stewardship of Sheikh Zayed began to play a key in the global economy, becoming a member of OPEC in 1971.

Through this forum, the UAE made significant contributions in stabilising the global economy as evinced by the positions that it adopted during several economic and political turmoil that swept across the world in the past. Given the role that the UAE had played in the recent global economic history and, considering its own successes at home which made the country an example worth emulating, it is safe to assume that the economic future is very rosy indeed and that the country will continue to be a major global player.

Recent successes are but indications that the UAE will move from one success story to the other. In this respect, it suffices to say that the oil sector continued its growth this year for the third year running to reach record levels in 2003 as a result of the improvement in global oil prices and increased production.

According to Obaid bin Saif Al Nasseri, Minister of Petroleum and Mineral Resources oil prices averaged US$28.1 per barrel in 2003 compared to US$24.4 in 2002 and US$23.1 in 2001. "This had a positive effect on the recovery of economic conditions in the United Arab Emirates, where the average GDP growth rate (according to preliminary estimates) reached 10% (current prices) and the growth rate of the non-oil sectors reached 6.4%.

Moreover, the UAE obtained a rating of A+ from the international rating agency "Moody's", to rank first in the Gulf as to credit rating," said the minister in recent remarks. It is worth mentioning that a rating of A+ is usually given to countries that enjoy strong creditworthiness and a low investment risk environment.

With respect to the performance of oil and gas sector institutions, it should be noted that these institutions have recently embarked on massive projects which have either been completed or are still in progress. These projects have been executed with greater emphasis on environmental protection, an area in which the industry recorded an outstanding success, thanks to its sound policies that are even-handedly responsive to the demands of sustainable development as well as to environmental conservation.

A report issued recently by the Abu Dhabi National Oil Company (ADNOC) said that despite the successes that have been made so far, the industry strives to achieve more successes so as to maintain its role as a key player in the global energy sector. In tandem with this aim, (ADNOC) has recently unveiled a plan to set up one of the world's largest Gas production plants. The plant will be operational when a current project, aimed at increasing the production capacity of the Habshan Gas Complex is completed.

The project will increase production to 4.5 million (cmpd) by year 2007. ADNOC also began a massive Onshore Gas Development Project (OGD), of which phases II and I have already been completed. As part of phase III, a new gas processing plant with a capacity of 1.2 million (cmpd) will be constructed.

In June this year, TAKREER announced that the front end engineering and design, FEED, for its Inter-Refinery Pipeline project had been completed and that the EPC contract for the project is expected to be awarded in the first quarter of 2005. A statement from TAKREER said that the FEED was now complete and forms the basis of an enquiry package to seek lump sum turn-key (LSTK) priced quotations on a competitive basis for Engineering, Procurement and Construction (EPC) including commissioning for the IRP Project.

Following an extensive evaluation process for potential contractors, the following EPC Contractors will be invited to bid the project: Eastern Bechtel Co. Ltd. (Bechtel) of USA/UK, Howe Baker Eastern Limited (C.B.I./John Brown) of UK, Clough Engineering Limited of Australia, Dodsal PTE Ltd. of India National Petroleum Construction Company (N.P.C.C.) of U.A.E., Techint Int.

Construction Corporation (TENCO) of Italy/South America, Technip Germany GmbH of Germany and Wilbros Middle East, INC. of USA The EPC Contract is anticipated to be awarded during first Quarter of 2005 with an implementation schedule of 31 months for hand over of the facilities to TAKREER in the 3rd Quarter 2007.

TAKREER said that the IRP Project will enhance the safe and efficient operation of the two refineries and further safeguard the environment through elimination of the need to transfer products between the two sites through marine tanker operation. The overall objective of the Project will meet TAKREER's core value to provide a healthy, safe and environmentally friendly operations.

TAKREER sources say that the Abu Dhabi Refinery which is located 22 kilometres, and Ruwais Refinery, located 250 kilometres from Abu Dhabi City both produce transportation fuels to satisfy the needs for the local markets in the UAE and certain export markets for Abu Dhabi Oil Refining Company (TAKREER). (The Emirates News Agency, WAM)


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