Fujairah /Abu Dhabi: The UAE is continuing in its plans to step up oil production levels in line with 2017 targets despite falling global prices, a senior government official said on Tuesday.
The UAE marginally increased production in August by 20,000 barrels per day (bpd) to reach 2.85 million a day, according to the International Energy Agency (IEA). The UAE has targeted to produce 3.5 million barrels a day by 2017.
Matar Hamed Al Neyadi, the Undersecretary of the Ministry of Energy, said that the UAE is increasing production to 3 million barrels a day by year-end to meet international demands. The UAE primarily exports to Asian markets. He was speaking at the Gulf Intelligence Energy Markets Forum 2014 in Fujairah on Tuesday.
Al Neyadi’s comments come at a time when global oil prices are falling to record lows amid United States-led intervention in Iraq and Syria against the Islamic State and increasing tensions between Ukraine and Russia.
In contrast with the UAE, neighbouring Saudi Arabia cut its production output by 330,000 a day to 9.68 million in response to weakening US demand, according to IEA.
Last week, Brent crude, a global market indicator, hit a 26-month low and on Tuesday was at $97.15 a barrel in early morning London trade. Analysts say that a combination of oversupply, growth in United States shale production and weakening growth in China is behind falling prices.
Pressed on the UAE’s outlook on declining oil prices, Al Neyadi, speaking on the sidelines of the forum, said the government believes prices will soon stabilise. “$100 [a barrel] is a fair price,” he said.
In November, the Organisation of the Petroleum Exporting Countries (Opec) will meet to discuss the drop in prices, a sensitive note for the oil-rich Arab Gulf states that are dependent on energy exports to fund national budgets.
Last week, Opec Secretary General Abdullah Al Badri said he expects the 12-member nation group to lower its target following the decline in oil prices. Opec’s preferred price is $100 a barrel.
Meanwhile, in Abu Dhabi on Tuesday, the UAE Minister of Energy, Suhail Al Mazroui, said it is too early to say whether Opec should cut its target.
“We’ll monitor the market and the decision will be based on what’s required of Opec,” he said.
The Undersecretary made similar comments in Fujairah by saying the UAE would reach a consensus with the Opec members.
“If there is a need we will step in… within our limitations,” he said, adding that the “stability of the market is important”.
— Additional reporting by Sarah Dia, Staff Reporter
