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19 April 2024

10-year oil revenue at Dh1.97trn

Oil production rose from 2.1mbd in 2001 to 2.4mbd in 2005 and that is where it has stood since and remains currently in 2011 (SUPPLIED)

By Parag Deulgaonkar

UAE’s oil revenue for the past decade totalled Dh1.91 trillion with the growth of the developing economies virtually assuring a “long healthy life” for the country’s economy, according to a new report.
“While the UAE economy was fortuitous in having high oil prices during most of the past decade (2000-10), the most remarkable feature of these recent 10 years was that UAE oil production increased by a mere 14 per cent, while oil revenues went up by almost four times,” Emirates Industrial Bank (EIB) said in a report.

Oil production rose from 2.1 million barrels per day (mbd) in 2001 to 2.4mbd in 2005 and that is where it has stood since and remains currently in 2011.

The country’s oil revenue was at Dh305 billion in 2010, jumping almost 50 per cent, from Dh203.5bn in 2009. In 2000, revenue stood at Dh86.7bn.  

Except for a short period early in the decade, oil prices have remained high for most of these ten years, and in the short run, oil prices seem to continue to remain robust, EIB said.  

"The only event in which oil prices could be threatened is if global demand falls. This is imaginable only in adverse economic conditions, otherwise, the growth of the developing economies virtually assures a long healthy life for the UAE oil economy and thus, also the rest of the UAE economy,” it added. 

The developed industrialised world accounts for virtually half of the demand for oil despite accounting for roughly a third of population. Demand in OECD countries is fairly stable, growing very marginally by less than one per cent in the 29 years between 1980 and 2009. 

The entire growth in demand has come from the non-OECD developing world, with China more than quadrupling and India almost quadrupling consumption during this period.  

In the most conservative scenario crude, the report says oil imports will keep increasing by 6.5 per cent per year until 2015, but the more liberal projection is for maximum 7.5 per cent growth.

"The real difference is in the following years. If the subsidies are to continue, demand is likely to more than double in the next 25 years,” EIB said.  International Energy Agency said in January it estimates the UAE's average sustainable crude oil production capacity is set to increase 12.5 per cent to 3.06 million barrels per day (bpd) by 2014.

The UAE currently has a sustainable crude production capacity of 2.72 million bpd. In 2010, the crude production capacity is estimated to have declined slightly to 2.71 million bpd, but will jump steadily from 2.75 million bpd in 2011 to 2.99 million bpd in 2013.

UAE's Oil Minister Mohammed Al Hamli said in January that the market was well supplied and high prices were mainly driven by traders and the cold weather.

"I still think the market is well supplied, and prices are driven by this cold weather and trader buying," he said, adding that the UAE was still producing within its quota.