Business | Oil & Gas
UAE slashes oil production following an Opec agreement
The UAE has reduced its crude oil output following an agreement with Opec.
- By Himendra Mohan Kumar, Staff Reporter
- Published: 14:49 November 3, 2008
- Image Credit: Ravindranath/Gulf News
- Gordon Brown, British Prime Minister, addresses the opening ceremony of Adipec at the Abu Dhabi National Exhibition Centre.
Abu Dhabi: UAE Energy Minister Mohammad Bin Dha'en Al Hamili said on Monday the country has begun implementing crude oil supply cuts in line with the decision of the Organisation of Petroleum Exporting Countries (Opec) last month.
Opec decided that its members should cut production by 1.5 million barrels per day (bpd) effective from November 1 in a bid to halt the slide in global crude oil prices.
"We have already advised our customers about the cuts," Al Hamili told reporters on the sidelines of the four-day Abu Dhabi International Petroleum Exhibition and Conference (Adipec-2008), which began here on Monday.
Adipec-2008 is providing a platform for companies to make significant business deals and new contacts. Some 1,500 exhibitors will use the opportunity to showcase their technological excellence, latest equipment and services to the expected 40,000 visitors who are scheduled to attend over the four days.
He however, didn't say by how much the UAE, a key Opec producer, had cut oil production. A communique from Opec after the output cut decision was taken by the group on October 24, said the share of the UAE in the overall cut announced would be 134,000 bpd.
The UAE's oil output declined marginally in the July-September quarter this year from the quarter earlier, averaging 2.66 million bpd, data recently released by the International Energy Agency (IEA) show.
Oil prices in the international market have dropped sharply - to below $70 (Dh257) per barrel levels - from an all-time high of $147.27 a barrel on July 11, mainly due to the financial market upheavals in the US and the subprime mortgage crisis, which are having repercussions on a global scale.
There are now fears of a global economic slowdown. Al Hamili said the steep fall in oil prices, however, wouldn't hamper investments in the projects already planned.
"Investment in oil industry is a long-term issue. The projects we have already undertaken are going ahead. It is important to invest in increasing capacity for the next cycle," said Al Hamili. He didn't elaborate.
Al Hamili wouldn't be drawn into commenting on whether the Opec, which produces more than 40 per cent of the world's oil, would announce a further cut in oil output at its next meeting in December, if the downward trend in oil prices didn't halt.
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