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Dubai prepares to increase its crude exports
Dubai is preparing to increase its oil exports, according to a senior Dubai government official.
- By Mohammad Ezz Al Deen and Ahmad Ameen, Staff Reporters
- Published: 00:00 August 9, 2006
Dubai/Abu Dhabi: Dubai is preparing to increase its oil exports, according to a senior Dubai government official.
The plan follows the creation of a new entity by the government to take control of its offshore oil resources from Dubai Petroleum Co, which is wholly-owned by US oil giant ConocoPhillips.
"The Dubai government is now in control of its oil wealth and will be able to increase its reserves and production rates, according to Dubai's economic plans," the official said.
"The emirate may change its production plans," the official said. "This change entails returning to the economic model of growth and elevation, instead of recession and decline."
"It [Dubai] has decided to manage its marine oilfields by itself for technical reasons related to increasing its oil administration capabilities," he added.
The issue of Dubai increasing its oil production seems to be "the real reason behind the early termination of ConocoPhillips' concession", said Raja Kiwan, senior researcher at Energy Intelligence.
"The fixed rate that ConocoPhillips used to get, no matter how much is produced, was a dollar per barrel, and to increase production they needed to introduce what is termed as the Enhanced Oil Recovery process which entails injection of steam and gas into the fields. That's a very costly method as it could have costed ConocoPhilips $15 to $20 per barrel."
"For a company like ConocoPhillips, Dubai's operation is minute compared to its global operations, and accordingly the company thought it unfeasible to complete the concession which was granted to it along with four other companies [Total, Repsol, RWE, and Wintershall] since 1969, and was to expire in 2012," Kiwan said.
According to industry sources, Dubai has two billion barrels of oil reserves, and the daily production does not exceed 90,000 barrels.
The increase in production poses a serious challenge for the newly-established company which has to study its options carefully before venturing into a major adventure.
Dubai also has 117-billion cubic metres of natural gas reserves.
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