UAE On Track To Meet 3.5 Mil b/d Production Capacity Target In 2017: Energy Minister
The UAE is continuing to invest in its oil and gas development plans despite lower oil prices, and is on track to meet its 2017 production capacity aims, energy minister Suhail al-Mazrouei said Sunday.
"We are continuing with our investments," Mazrouei said at an energy event in Abu Dhabi, state-run WAM news agency reported Sunday, adding that was no delay due to the fall in the price of crude oil.
The sharp oil price decline that began in the second half of 2014 has prompted concern over upstream investments, but Mazrouei reiterated that the UAE remained on track to meet its medium-term production capacity target of 3.5 million b/d by late 2017 or early 2018, up from around 3 million b/d currently.
Abu Dhabi is still in talks with international oil companies for stakes in its onshore concession, which covers the emirate's major onshore oil fields representing more than half its production.
The new 40-year production sharing agreements offer access to fields with more than 100 billion barrels of oil still in place. But after several years of talks, Abu Dhabi has so far announced only three partners for the new concession -- Total, with a 10% working interest, Japan's Inpex (5%) and a joint venture of South Korea's KNOC and GS Energy (3%).
Some 22% of the Abu Dhabi Company for Onshore Oil Operations, or Adco, concession is still up for grabs. A raft of other projects are also still awaiting approval.
However, at the same time, Mazrouei said the government is investing in alternative power sources to minimize natural gas consumption and imports.
"We are investing $35 billion for that purpose," he said.
The UAE hopes to reduce natural gas as a feedstock in power generation to 70% by 2021, down from 100% currently. Emirates LNG, a joint venture between Abu Dhabi's state-owned Mubadala Petroleum and International Petroleum Investment Co. is planning to build a 15 million mt/year LNG import terminal at Fujairah.
Once completed, the facility, along with import facilities already installed at Dubai's Jebel Ali terminal, will take the UAE's total LNG import capacity to 18 million mt/year.
The UAE also has the capacity to export 8 million mt/year of LNG.
Along with imports, Abu Dhabi has spent more than $15 billion over the last five years developing technically complex sour gas resources at the Shah gas field to meet growing domestic gas demand. It is set to make final investment decision with its partner Shell on the similarly challenging Bab gas field in 2017.
Originally due to be made in 2016, the delay is part of Shell's plan to cut costs and prioritize its upstream spending. The Bab project, currently in the front-end engineering and design phase, will eventually produce around 1 Bcf/d of raw gas.
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- October 5, 2015
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