Oil output to hit 3.4m barrels by 2012

The UAE is increasing its T crude production capacity to 2.9 million barrels per day by the end of this year, from the level of 2.7m barrels it achieved at the end of 2006. Capacity will stabilise at that level until 2010, when offshore increments will take it to 3.4m barrels each day by 2012, data show.

The country pumped a daily average of 2.53m barrels of crude oil last year, compared with 2005’s daily average of 2.45m barrels, according to data collated by Kuwait-based Gulf Investment House.

This increase in production puts the UAE’s output around 100,000 barrels per day ahead of the quota assigned to it by the Organisation of Petroleum Exporting Countries, of which the Gulf state is a member.

The UAE contains proven crude oil reserves of 97.8 billion barrels, or slightly less than eight per cent of the world’s total reserves. Abu Dhabi holds 94 per cent of this amount, or about 92.2 billion barrels. Dubai contains an estimated four billion barrels, followed by Sharjah and Ras Al Khaimah, with 1.5 billion and 100 million barrels of oil, respectively.

Production growth will come mainly from Abu Dhabi, where ongoing investment at onshore fields feeding the Murban crude stream is already beginning to show results. On the other hand, Ras Al Khaimah is increasing its crude capacity through acquisitions of companies that own fields in other countries.

According to a report last week by the Paris-based International Energy Agency (IEA), Murban’s capacity, which stood at 1.2m barrels per day in 2005 and 1.3m in 2006, is expected to average 1.55m barrels per day in 2007 and 1.58m in 2008.

“Longer-term expansion from Abu Dhabi is likely to shift offshore,” the IEA report said, “to the Upper Zakum and Umm Al Shaif fields, but this is only likely to result in higher capacity in 2010-11.

“In all, UAE capacity could rise to 2.9m barrels per day by end-2007… stabilising at that level through 2010 before offshore increments allow a further increase to 3.4m barrels a day by 2012,” the IEA said. PARTNERSHIPS The UAE has undertaken a number of partnerships with foreign oil giants to facilitate technology transfer and improve efficiency.

Recently, the UAE Supreme Petroleum Council awarded ExxonMobil a large equity stake in Abu Dhabi’s Upper Zakum oilfield, underlining the emirate’s commitment to working with international partners.

The agreement gives the US energy giant 28 per cent ownership of the offshore field. The stake held by the Abu Dhabi National Oil Company (Adnoc) fell to 60 per cent, while Japan Oil Development Company retained its 12 per cent stake. Adnoc aims to boost production at the field to 750,000 barrels per day, up from the current 550,000 barrels.