UAE oil income to decline 43% in 2009

A sharp decline in crude prices will ally with lower production to cut UAE's oil export earnings by about 43 per cent in 2009, while Opec's revenues could suffer more, said an international energy centre yesterday.

From a record $81 billion (Dh297bn) in 2008, the UAE's crude export revenues are projected to plunge to about $46bn in 2009, said the Centre for Global Energy Studies (CGES), which is run by former Saudi Arabia's oil minister Sheikh Ahmed Zaki Al Yamani.

The figures, sent to Emirates Business, showed UAE's revenues will also be lower than in 2007 when they stood at $58bn the 2006 earnings of $53bn.

But they are forecast higher than the 2005 income of $42bn and more than double the 2003 revenues of $21bn.

The report showed the combined income of the

12-nation Organisation of Petroleum Exporting Countries (Opec) would tumble by 53 per cent from $854bn in 2008 to $501bn in 2009.

"The forecast for 2009 are based on an average price of Opec's basket of $60.6 compared with a record $94.2 in 2008... the group's production is also projected to average 28.6 million bpd this year compared with 32.1 million bpd in 2008," said CGES's Deputy Director Leo Drollas.

Oil prices exceeded $70 a barrel last month but they have averaged below $50 so far this year as they were as low as $40 in the first two months. Prices dipped by more than $100 in late 2008 from their record high level of $147 in July because of weakening demand due to the global downturn.

The fall prompted Opec to agree on cumulative combined output cuts of about 4.2 million bpd, most of which were shouldered by Gulf oil majors, which are believed to have trimmed supplies by more than two million bpd. As a result, Saudi Arabia is expected to suffer most as it is the world's largest crude exporter.

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