UAE to lift oil capacity to 3.5 mbd by 2006
Posted: 13 October 2004
GCC oil ministers have called upon the international community to take appropriate measures to reduce the negative impacts of oil fluctuations on their economies.
The call came after the inauguration of ADIPEC 2004, the 11th edition of the Abu Dhabi International Petroleum Exhibition and Conference, which is being held under the patronage of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and Chairman of the Supreme Petroleum Council.
Obeid Bin Saif Al Nassiri, UAE Oil Minister said, “…..fluctuations that the market is going through are temporary and will not last long.” He hopes prices will stabilise once the regional and international political situation stabilises. He also said the UAE plans to increase its oil production capacity to reach 3.5 million barrels per day (MBD) by 2006 from 2.5 mbd today.
Sheikh Fahad Al Ahmad Al Subah, the Kuwaiti Oil Minister, who was present at the inauguration said, 'The oil fluctuation is developing into a very dangerous one. The current rise in oil prices are not linked to supply and demand forces but to the current security and political situation in the area and the international situation in Russia and Nigeria'. Al Subah added that OPEC is seeking to ease the impact of steep rise in oil prices. ' Kuwait is committed to OPEC policies and is producing 2.5 mbd and we are willing to produce 200,000 barrels more per day. There are no shortages in oil supplies he said and added that the increase in oil prices is due to fears of future shortage that may occur due to the deteriorating security situation.
Al Subah considered the call from some quarters to maintain the OPEC capacity without hiking it as non-practical as it is a short-term solution and wouldn't benefit the international economy in the long-term. He added that it was very hard to speculate on the market situation or the price levels because of the incidents in the Middle East. As per the current solutions, Kuwait will be producing an additional 200,000 barrels per day said Al Subah.
In addition he also said that the increase in output promised by Saudi Arabia to meet the expected demand in the final quarter of this year due to the increased consumption of fuel for heating in the winter months, would definitely help the situation.
He added that OPEC in its forthcoming meeting in Saudi Arabia will discuss rising prices as well as the impact on the international market. He also said discussions would involve the possibilities of changing the range of these (high) prices to between $32 to $35 per barrel.
Al Nuaimi, the Saudi oil minister said, “OPEC countries are doing their best to meet the increasing international demand. Saudi Arabia is prepared to increase its production capacity by a million barrels per day if needed. Saudi is producing more than 11 mbd and will therefore be in a position to produce 12 mbd'. Al Nuaimi also said that there are current development plans underway for oil fields and increased production capacities and that Saudi will dedicate some of its production as ready reserves to be pumped in the international market if needed.
Posted by Alexander Lindsay, Editor Pipeline Magazine
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