The UAE will boost its oil production by more than 10 per cent to three million barrels per day in 2012 as part of collective Opec plans to expand crude supply capability, said a Western oil analyst.
The increase will maintain the UAE’s position as one of the world’s largest crude oil producers and a key player in the global market, said Julian Lee, senior energy analyst at London’s Centre for Global Energy Studies (CGES), owned by former Saudi oil minister Sheikh Ahmed Zaki Al Yamani.
The UAE has set a target to increase its sustainable crude output capacity by one million bpd by 2012 but nearly 300,000 bpd will be added because of market conditions and demand growth, Lee said in a copy of research papers sent to Emirates Business.
The UAE currently has a sustainable capacity of around 2.7 million bpd but actual production averaged nearly 2.6 million bpd in March, creating a spare output capacity of 100,000 bpd, the study said.
The increase in the UAE’s capacity is part of overall expansion plans by the 13-nation Organisation of Petroleum Exporting Countries (Opec) to lift crude capacity to meet growth in demand for its oil in the medium and long term.
While the target is to add around 12.8 million bpd to 48 million bpd in 2012, actual additions could be only around 3.5 million bpd to boost the cartel’s combined production capacity to 38.7 million bpd.
The figure does not include natural gas liquids (NGLs), which could rise by 1.2 million bpd to around 5.7 million bpd to push Opec’s total oil and NGL output capacity to 44.4 million bpd in 2012, Lee said.
A breakdown showed Saudi Arabia, the world’s largest oil exporter, would account for the bulk of the capacity increases in Opec, as it would add around 1.2 million bpd to its present sustainable capacity of 11.3 million bpd.
Saudi Arabia also accounts for the bulk of Opec spare capacity as the Kingdom has traditionally maintained about two million bpd in extra capacity to support its long-standing role as a residual producer.
Lee’s study showed Saudi Arabia’s spare capacity stood at around 2.1 million bpd in March, accounting for 75 per cent of Opec’s total surplus capacity of nearly 2.82 million bpd.
The UAE’s 100,000 bpd spare capacity accounted for four per cent.
Conflict-battered Iraq had a spare capacity of around 70,000 bpd in March as it pumped 2.38 million bpd and its total capacity stood at 2.45 million bpd.
Iran had a relatively small idle capacity of around 40,000 bpd as the country is pumping at near capacity of around four million bpd and is finding it difficult to develop its fields due to equipment shortages.
In his study, Lee gave no figures for Opec investment in capacity expansion projects, but according to a recent report by the organisation, more than 100 expansion and development projects worth $120 billion (Dh440bn) are undertaken by member states.
Lee gave scenarios for the forecast call on Opec’s oil, including Opec’s estimates in three cases – reference case, high and low cases – projections by the International Energy Agency, and CGES.
In Opec’s reference cases, demand will rise from 35.9 million bpd in 2010 to 40.6 million bpd in 2015.
In the high growth scenario, it will increase from 36.4 million bpd in 2010 to 42 million bpd in 2015.In the low growth case, it will swell from 34.7 million bpd in 2010 to 27.2 million bpd in 2015.
UAE to boost oil production