Abu Dhabi oil exports dip Dh71bn

Lower oil prices and production depressed Abu Dhabi crude exports by more than Dh71 billion in 2009 and the plunge sharply cut the emirate’s total exports and trade surplus, official data showed on Thursday.

The figures by the Abu Dhabi Department of Economic development (ADDED) showed foreign direct investment (FDI) flow into the emirate nearly doubled to exceed Dh30 billion in 2007 and Europe maintained its position as the largest capital exporter Abu Dhabi, accounting for more than a third of the total.

The study, part of section three in ADDED’s annual report being released gradually this week, attributed the surge in FDI to better investment laws in the emirate and high growth in the domestic economy due to strong crude prices. But it gage no FDI figures for the following years although data by UNCTAD showed the UAE as a whole attracted in excess of $13 billion in 2008 before the level plunged to only about $four billion in 2009.

From around Dh384.8 billion in 2008, the value of Abu Dhabi’s oil exports slumped to nearly Dh313 billion, a decline of Dh71.4 billion or 18.6 per cent.

But non-oil exports, which are still a fraction of the emirate’s total exports, swelled to around dh9.5 billion from Dh8.25 billion. Re-exports also grew to nearly Dh8.6 billion from Dh6.2 billion.

The decline in oil sales depressed the emirate’s overall exports by around 16.6 per cent to Dh331.1 billion in 2009 from Dh397.3 billion in 2008.

The report showed imports increased to around Dh93.8 billion in 2009 from about Dh90.2 billion in 2008 and the bulk of the increase was in exports of capital goods, which rose to Dh25 billion from Dh21.9 billion.
The fall in exports pushed down the emirate’s trade surplus to around Dh237.3 billion last year from nearly Dh307 billion in 2008.

Abu Dhabi, which controls over nine per cent of the world’s recoverable crude deposits, trimmed its oil supplies by around 200,000 barrels per day through late 2008 and 2009 in line with a collective agreement by the 12-nation Organization of Petroleum Exporting Countries (OPEC) to cut output to prop up oil prices.
Despite their recovery in the second half of 2009, oil prices averaged nearly $35 below their 2008 record high level of around $95.

The decline in oil prices and output slashed the UAE’s crude export revenue to around $50 billion last year from a peak of $90 billion in 2008.
Besides depressing the trade surplus, the decline also sharply cut the UAE’s current account balance and fiscal surplus in 2009.

A breakdown showed Qatar was the main market for Abu Dhabi’s exports, with an import value of nearly Dh3.8 billion in 2009. Nigeria and Saudi Arabia were second and third markets, with Dh1.2 billion and Dh878 million respectively.

Bahrain was the top market for Abu Dhabi’s re-exports, with its import value standing at around Dh1.9 billion. It was followed by Qatar with around Dh1.5 billion, Saudi Arabia with Dh1.2 billion and Oman with Dh715 million.

As for imports, the United States emerged as the dominant export to Abu Dhabi, with a value of about Dh12.4 billion in 2009. It was followed by Germany with around Dh10.1 billion, Saudi Arabia with Dh9.5 billion, Japan with Dh8.7 billion, South Korea with Dh8.09 billion and Italy with Dh5.3 billion.

The report showed FDI flow into the emirate jumped to a record high of around Dh31.4 billion in 2007 from nearly Dh16.1 billion in 2006.

“With the continuing process of development and the adoption of economic reforms and incentives by Abu Dhabi to enhance the investment environment, FDI attracted by the emirate recorded a substantial increase of nearly 94.6 per cent in 2007 over the previous year,” the report said.

The European Union was by far the top FDI exporter to Abu Dhabi in 2007, when it pumped nearly Dh11.8 billion. FDI from Asian countries stood at Dh2.69 billion while they were estimated at Dh2.3 billion from the United States, Canada and other American nations, Dh2.16 billion from other Arab countries and Dh257 million from the UAE’s five partners in the Gulf Cooperation Council (GCC).

Sector-wise, the real estate sector was the main target of FDI in 2007, receiving nearly Dh11.8 billion, accounting for around 37 per cent of the total.

Water and Electricity was the second largest beneficiary, with around Dh6.1 billion while FDI stood at Dh4.5 billion in the financial and insurance sector, nearly Dh2.8 billion in construction and Dh2.4 billion in industry.
 

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