Abu Dhabi's surplus to soar on oil revenues

Abu Dhabi: Abu Dhabi is likely to accumulate an investible surplus of $800 billion by 2020 due to massive cash flows as a result of oil revenues, McKinsey & Company's managing director for the Middle East said on Sunday.

Of the $2 trillion investible surplus flowing to the six countries comprising the Gulf Cooperation Council (GCC), $800 billion would come to Abu Dhabi. This is based on an estimated average price of $50 per barrel between 2005 and 2020," Kito de Boer said at the ongoing MEED conference here.

"Abu Dhabi will have the highest concentration of wealth seen nowhere else on the planet due to its vast natural endowments," said de Boer.

Youssef Nasr, HSBC Middle East's regional chief executive officer, said the current all-round boom in Abu Dhabi is going to be sustained due to big increases in oil and gas demand from China and India. "Abu Dhabi will accumulate large surpluses due to high oil prices," he said, adding that there's a genuine demand in the market that's supporting oil prices which are at all-time high levels.

On Friday, crude for January 2008 delivery in the United States, the world's largest oil consumer, settled at $93.84 a barrel on the New York Mercantile Exchange. Earlier this month, Nymex crude surged to an all-time high of $98.62 per barrel on new geopolitical tensions and demand-supply gap in the global oil market.

Crude supply

UAE crude output is thought to have stabilised at 2.55 million barrels a day due to ongoing maintenance at some of its offshore fields, says the latest report of the International Energy Agency (IEA).

Abu Dhabi's output comprises more than 90 per cent of the UAE's oil production. The emirate has planned investments of more than $20 billion to boost its oil and natural gas output.

According to the latest estimates, Abu Dhabi's oil production would rise from 2.6 million barrels per day to around 3.5 million barrels per day by 2011. At present, oil is being produced at only 18 of 67 potentially known fields in the UAE.