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19 March 2024

Oil prices are not high: UAE

UAE minister says oil prices not too high. (AP)

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By Staff

The UAE believes oil prices are not high but their current level will encourage investment in the hydrocarbon sector to meet growth in global demand, the country’s Energy Minister has said.

Mohammed bin Dhaen Al Hamili said massive investments are needed to be pumped to expand crude output capacity and develop hydrocarbon reserves to ensure the future needs of consumers.

Addressing a renewable energy summit in Washington, Hamili said the UAE has decided to rely on nuclear energy to cut domestic oil consumption and maintain exports to consumers in the long term.

“Over the past few months, some have complained about the increase in oil prices…but the fact is that prices are not high considering the enormous investments needed for the hydrocarbon industry,” he said.

“But I believe the current prices will allow hydrocarbon rich countries, including the UAE, to invest in this sector in the coming years to meet growing demand…the UAE has already done this by expanding its capacity.”

Hamili said that when oil prices tumbled to only around $35 a barrel after the eruption of the global fiscal distress in September 2008, producers felt that prices have reached the minimum level needed to cover only part of their projects.

He said the collapse forced many producers to halt exploration for oil in new areas and focus on the development of existing discoveries.

“The age of easy access to oil has gone….new technology and innovation are required today to find more oil because production and exploration costs have increased so sharply that many producers, including those in the Gulf, have started to consider new options, including gas,” he said.

“ Today we live in an age of globalization, where all countries interact and rely on each other in providing energy needs…the UAE and other oil-rich countries realize their responsibility in ensuring sustained energy supplies…but this can not be achieved without pumping heavy investment in capacity expansion.”

Hamili noted that the UAE, which controls the world’s fifth largest proven oil reserves, had provided the world with stable and secure hydrocarbon supplies over the past 50 years, adding that it was among the first producing nations to increase output during global crises.

He said the UAE is recording rapid growth in most economic sectors and this has largely boosted its energy consumption over the past years.

“Energy demand is projected to double by 2020 and this could boost competition for energy resources….in the UAE, we have faced the option of whether to use a large part of its hydrocarbon production for local consumption or resort to other energy sources, including nuclear energy…we have taken the second option.”

Hamili said the UAE would develop a massive nuclear energy programme for peaceful purposes following its recent agreement with a consortium of world companies, adding that nuclear energy would supply the country with nearly 25 per cent of its total energy needs.

“The UAE believes that oil is a dear commodity which should not be wasted…for this reason it is now playing a leading role in the search of sustained energy and this was illustrated by the launch of the Masdar Initiative involving the investment of $billions…this is part of the UAE’s philosophy to protect the environment and slash carbon emission by at least 50 per cent in the next years.”