UAE to push expansion of oil and renewable energy

The UAE produces about 2.3 million barrels of oil per day. (AFP)

The UAE said yesterday it will push ahead with the expansion of its hydrocarbon sector despite plans to pump massive funds in the renewable energy industry.

But Energy Minister Mohammed bin Dhaen Al Hamili stressed that the UAE and other Opec members need to be reassured on growth in global oil demand so they can make sufficient investments in capacity expansions. Hamili made the remarks during talks with US Secretary of Energy Steven Chu, who arrived in the UAE yesterday after having talks in Saudi Arabia.

The one-hour meeting covered co-operation between the UAE and the US in the hydrocarbon and renewable energy sector and they stressed the need for US firms to continue their role in the UAE energy sector.

"The minister affirmed during the meeting that the UAE will continue its investments in developing renewable energy sources to diversify its reliance on energy resources," a ministry source told Emirates Business. "But the minister also made clear that such investments would not be at the expense of other projects in the hydrocarbon sector… the minister said the UAE would push ahead with its investments in oil and gas to expand capacity."

According to the source, Hamili also stressed during the meeting that the UAE and other producers within the12-nation Organisation of Petroleum Exporting Countries (Opec) need assurances about global demand so they can invest in capacity expansions and ensure stable oil supplies to consumers.

"The minister emphasised the importance of security of demand… he stressed that Opec wants to be reassured on global demand so it will make sufficient investments in capacity expansion and avoid any supply shortage."

The UAE, which controls the fifth largest proven oil deposits, has been locked in a drive to increase its oil and gas production capacity to meet global demand.

Official figures showed the country, which produces about 2.3 million barrels per day, has pumped more than Dh100 billion into projects over the past nine years to expand its hydrocarbon production capacity. The funds account for nearly 11 per cent of the total investments by the public and private sector during 2001-2009, the Ministry of Economy said.

The figures showed hydrocarbon investments have steadily grown during that period to hit an all-time high of over Dh20 billion in 2009.

The report gave no forecasts about future hydrocarbon spending but industry sources expect it would gain momentum in the coming period as the UAE is stepping up plans to raise oil and gas output capacity, expand its refining production, and set up new petrochemicals projects.

According to the Saudi-based Arab Petroleum Investment Corporation, the UAE is expected to spend nearly $12.5bn on crude output capacity expansion ventures between 2008 and 2012.

The funds are part of total investments of around $31.7bn in the energy sector, including oil, gas and electricity. The UAE's current sustainable oil output capacity is estimated at 2.8 million bpd and the new projects would lift it above 3.5 million bpd by 2015.

 

 

Nuclear Co-Operation deal

 

UAE Minister of State for Foreign affairs Dr Anwar Gargash and US Secretary of Energy Steven Chu signed an implementation arrangement between the UAE Foreign Ministry and the US Department of Energy concerning information exchange and co-operation in the peaceful uses of nuclear energy on February 24, 2009, in Abu Dhabi.

The implementing arrangement establishes a framework via which the US Department of Energy, through its National Nuclear Security Administration, would co-operate and support UAE authorities involved in the development of peaceful nuclear energy sector.

Gargash said that "the arrangement is a further framework for co-operation between the two governments in the peaceful nuclear energy field. It is an excellent platform for UAE entities to benefit from the technical competence and expertise possessed by the Department of Energy in the area of nuclear energy."

The arrangement allows for the exchange of technical information, training of personnel, access to DoE technical laboratories, holding of workshops and other joint co-operation activities to assist UAE entities in their development of the required infrastructure and human resources for the nuclear energy sector.

"This arrangement is part of the Obama Administration's commitment to ensuring peaceful nuclear power is an important part of the global energy mix," said Chu. "We welcome this deal with the UAE to reduce carbon pollution through the development of clean sources of energy." (Wam)

 

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

 

Print Email