Abu Dhabi: The UAE has said that falling oil prices has not impacted its economy and it will continue to invest in the oil and gas sector to deal with the demand for energy as the Organisation of the Petroleum Exporting Countries (Opec) group gets ready to meet in Vienna at the end of the week. The country has not given any hint as to whether there will be any production cuts at the meet.
Suhail Bin Mohammad Al Mazroui, Minister of Energy, said it is not the first time that prices have dropped. He said in 2008 oil prices were $40 (Dh146) and the country did not stop production.
“We will deal with this issue at our meeting this week. The drop in prices has benefited oil consuming countries while the UAE economy has not been impacted. We will continue to invest in the oil and gas sector,” he said while talking with journalists in Abu Dhabi on Monday.
He said the contribution of oil revenue towards the UAE’s Gross Domestic Product (GDP) is less than 30 per cent. “The recent oil price is not a setback for us. We have a long-term strategy and vision. Our economy is based on diversification.”
The UAE produces around 2.8 million barrels of oil per day and has pledged to increase the capacity to 3.5 million barrels per day by 2017.
The minister said this year the UAE will start producing gas from a Al Hosn Gas field. “We will start supplying gas drawn from this field. Extracting gas from this field was very difficult.”
He did not say whether they would take any decision to cut oil production to stabilise oil prices. “Let’s not jump the gun. Let us wait till the end of the week.”
He said the country has a clear strategy in dealing with subsidies in diesel and electricity and will continue it.
Opec countries are due to meet in Vienna on Thursday amid growing pressure from member countries like Venezuela and Iran to cut production. Prices have fallen by more than 30 per cent since June.
Iran’s state run Mehr news agency said Iran’s oil minister Bijan Namdar Zanganeh will meet his Saudi counterpart in Vienna to persuade the oil giant for cuts in oil production and supply. The minister was in the UAE last week to hold discussions on oil. The news agency said there might be a proposal to cut production to one million barrels day.
An energy expert said there may not be production cuts but the likelihood of an agreement to reduce production has increased in the past few days. “It seems that there were a number of bilateral meetings among oil representatives of Opec members in the last days, and that alone, is enough to believe that some agreement might be in the making,” said Francisco Quintana from Asiya Investments.
“But, I insist, we still operate with the assumption that no substantial changes will come out of the meeting.”
Countries like Iran and Venezuela are facing a budget deficit as the oil price falls. Goldman Sachs predicted last month oil prices will be under $80 per barrel in the second quarter of next year.
