The UAE’s oil production capacity reached 4.2 million barrels per day in April, prior to the historic pact to restrict output by the Opec+ alliance, according to the country’s energy minister.
The UAE, Opec’s third-largest producer is on track to increase its output capacity to 5m bpd by 2030 as oil prices reach normal levels in “two or three years”, Suhail Al Mazrouei told a virtual conference organised by the US think tank Atlantic Council.
"We have tested our capacity back in April, when there was no deal and we reached a new milestone which was 4.2m bpd and our capacity is something we will only use outside the deal,” he said.
"The UAE has a longer vision of when it comes to using the spare capacity and it will be used without disrupting the Opec+ deal.”
The UAE is backing a historic production cut to rollback nearly 10m bpd from the oil markets until the end of July. Abu Dhabi voluntarily cut an extra 100,000 bpd to help rebalance markets amid the coronavirus pandemic.
Mr Al Mazrouei, who oversaw the strengthening of alliance between 23 member and non-member producers into a supergroup during his presidency of Opec in 2018, said that he considered Opec+ a permanent grouping. He also remained hopeful that laggards within the group such as Iraq and Nigeria would fully comply and compensate for overproduction over the coming months.
"The assurance that we got is a great demonstration of what Opec+ can do. This is a permanent group in my view. People were questioning 'do we really need this group?' but when the pandemic happened, everyone was calling us to do something, including President Trump,” he said.
“When Mexico had a problem the US helped Mexico to make the cuts. We demonstrated we need each other and need to help each other.”
Opec+ is set to reduce its output cuts from the beginning of August, with curbs set to remain in place until April 2022.
The joint ministerial monitoring committee of the alliance is set to meet on Thursday to review its members' compliance for this month.
The UAE’s output for June averaged 2.464m bpd, the minister said. Demand for energy also seemed to be picking up as movement restrictions eased, Mr Al Mazrouei said.
The country is also diversifying its energy mix, investing heavily in renewables such as solar power and nuclear energy to free up crude for exports.
Mr Al Mazrouei said that the UAE’s first nuclear reactor at Barakah was on track but the country would take its time to ensure the full safety of operations.
“We are on the trajectory - when exactly I cannot tell you. Starting a nuclear plant is not a walk in a park. We are not going to start unless we’re 100 per cent confident in the safety of the plant. Look at any nuclear plant, no one has delivered a nuclear plant at a faster pace than us, even while taking those necessary steps required by the regulator."