Abu Dhabi: A top executive of the Abu Dhabi National Oil Company (Adnoc) said that the drop in oil prices had not had an impact on its research and development (R&D) budget. However, the company has been requested to reduce operational expenditure by 10-15 per cent this year.
“We’ve seen a lot of companies laying off workers and reducing their numbers. We did not go through this,” said Yasser Saeed Al Mazroui, deputy director of exploration and production at Adnoc. “On the contrary, we’ve been pushed by the management to advance the development of UAE nationals in Research and Development.”
Al Mazroui was speaking at a press conference on the sidelines of the Abu Dhabi International Research and Development Conference and Exhibition on Sunday.
“We are not cutting down budget but increasing the number of people going abroad to study to develop skills. I believe it is too early on cutting down or putting a limitation on the research,” he said.
“[The] R&D budget has been increasing proportionately over the years and we’ve never been asked to put a cap on our budget. For the past ten years, we’ve been investing on research and development. Whenever we had a proposal it was never dropped.”
He did not specify how much money had been allocated to the cause of research and development in the company.
Oil prices over the past year have fallen by more than 50 per cent due to a global crude glut, caused by record shale oil production from the US and weakening global demand. In June of last year, crude stood at $115 and then dropped to the mid-$40s before recovering slightly. On Friday, the commodity closed at $65.37.
The UAE government had announced that it will continue to invest in the oil and gas sector to increase oil production to 3.5 million barrels per day (mbpd) by 2017. The country currently produces about 2.8 million barrels per day.
A key meeting of the Organisation of the Petroleum Exporting Countries (Opec) is due to take place in Vienna in June to take stock of the situation and decide on the future course of action related to slide in oil prices.
Meanwhile, Adnoc is building a research centre that will start functioning this year in Abu Dhabi.
“The new centre will be world class and we’ve brought in best people to design it,” Al Mazroui said. “We are collaborating with international oil companies to work with us in the centre.”
When asked about the Abu Dhabi oil concession, Al Mazroui refused to answer and said there are right people working in this area.
The Abu Dhabi government recently awarded concessions to three companies for a period of 40 years to develop onshore oilfields producing 1.6mbpd, with a target of 1.7mbpd from 2017.
Total bagged a 10 per cent stake in the onshore oil concessions while Japanese company Inpex was awarded 5 per cent share and Korean firm GS Energy 3 per cent.
Other participating companies are yet to be decided.
