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UAE NATIONAL DAY REPORT 2002 - Oil

posted on 02/12/2002: 1475 views


Oil industry in UAE has been influenced by political and economic developments at regional and international arenas during 2002. However, the UAE government has succeeded in addressing these developments, thanks to its far-sighted oil policy and cooperation with the Organisation of Petroleum Exporting Countries (OPEC). In this context, UAE took part in the GCC Oil Cooperation Committees meeting, held in Muscat in October, the 8th Energy Forum in Osaka, Japan, on September 21 and the 7th Arab Energy Conference in Cairo in May.



Political and economic developments have, at varied degrees and levels, had positive impacts on global oil markets with prices ranging between $23-24 per barrel, a rate close to average prices in 2001. And this in term has kept oil revenues stabilised and balanced, a matter which will have positive effect on various economic sectors. OPEC has also played a significant role in having oil prices stabilised by maintaining the production ceiling at 21.7 million barrels per day in 2002.



UAE contribution to OPEC's meetings has always been positive and has adhered to its production quotas as decided by OPEC in 2002, yet it is prepared to supply markets, in co-ordination with OPEC, with sufficient quantities of oil if need be.



Obeid bin Saif Al Nasiri, UAE Minister of Petroleum and Mineral Resources, told representatives of 1,200 companies and 500 oil experts, who gathered in the UAE in October to attend the 10th Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2002), that despite fluctuations in global oil markets, the petroleum sector in the Emirates has witnessed remarkable progress.



He said that the assured oil reserves had doubled several times over the past 30 years from 30 billion barrels per day in the 1970s to 98 billion at present. "Similarly, assumed gas revenue has surged from 626 billion cubic metres to 6 billion during the same period," Nasiri said. He noted that UAE's oil output has jumped from 800, 000 a day in 1970 to around 2 million by the end of 1991.



However, due to successive increases in quotas of individual OPEC member state in a bid by OPEC to curb hikes in prices, UAE's quota was raised by 333,000 bpd in 2000 to reach the level of 2 million before it was reduced to around 1.9 billion bpd at present, again on OPEC's decision to reduce production ceiling. Nasir said that his ministry was participating regularly in relevant international forums, particularly the UN framework agreement on climate change. He predicted that crude oil prices were likely to rise if political tensions in the region continue to deteriorate, adding that recent developments had already affected oil markets and sent prices upward.



"Crude oil is currently selling at a premium of over $5 a barrel due to the political tensions and is poised to increase if the situation deteriorates," the minister said. He added that oil markets had sustained relative stability in the past few months. "OPEC crude basket is now selling at about $28 a barrel while the annual price rate per barrel since the advent of the year till now had topped $23.7, that is slightly more than the price of barrel last year which was $23.1 per barrel," Nasiri said.



He argued that despite efforts by oil producers to ward off pollution and maintain a clean environment several western countries were trying to capitalise on the issue by imposing tax surcharges on petroleum products under various pretexts such as climate phenomenon, green-house effects, etc.



"Such measures adopted by industrialised countries will undoubtedly have reverse impact on growth of global demand for oil and hence on producing countries' revenues," the minister said.

The Gulf region, he added, is considered the most important investment attracting hub as far as oil industry is concerned.



The petroleum and mineral resources minister said UAE's policy in regard to the gas industry would concentrate in future on the development of gas resources and extensive use of gas in power generation, water desalination and petrochemical projects. He added that the county has already privatised three power generation and water desalination plants, with the private sector holding 40 per cent of the shares.



Addressing the 8th International Energy Forum, held in September in Osaka, Japan, Nasiri indicated that the Abu Dhabi National Oil Company (ADNOC) was engaged in continued oil exploration and development of oilfields and all oil industry installations with the objective of upgrading oil and gas output capacities and various value-added hydrocarbon manufacturing processes. Abu Dhabi is involved in a programme to maintain oilfields and lift production capacity to retain its position as a top oil producer.



ADNOC said expansion projects at oil facilities would raise the UAE's sustainable crude output capacity from around 2.5 million barrels per day to 3.6 million bpd in 2005 and four million in 2010.



In July, ADNOC, ADMA and Zadco said they had completed the first phase of a project involving the biggest seismic survey of its kind in the world to develop Lower and Upper Zakum. "The project involved various technical design innovations that were managed by the project team," it said in its monthly bulletin. "These included the use of dry gas seal for the compressors and modern control systems, with performance control and load sharing." ADNOC has launched a new project to handle oil waste in a drive to protect the environment and minimise pollution.



The Beiat or environments project is being carried out in collaboration with an international company and it involves safe means for the disposal of industrial and oil waste resulting from production and maintenance operations by ADNOC and its affiliated companies.



Around 6,000 tonnes will be handled every year by the new waste plant which will be launched by the end of 2004, according to an ADNOC. Beiat is the first project of its kind in the Middle East and it will handle all waste caused by operating oil companies unlike similar projects in other oil producing countries which provide partial treatment of waste. One of its unique features is that the plant will partially run on petroleum products which are extracted from the oil waste.



It is one of the safest and environment friendly projects as the plant will enjoy a high degree of environment protection, health and safety. Designs for the project near Gayathi are under way and it will take into consideration any possible effects on the neighbourhood. The project is one of the most important environment projects in the UAE and it illustrates the policy of President His Highness Sheikh Zayed bin Sultan Al Nahyan, who gives priority to environment protection and sustainable development. (The Emirates News Agency, WAM)

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