UAE energy minister heads to Doha ‘freeze’ meeting even as oil output set to rise

The UAE energy minister Suhail Al Mazrouei would attend the Doha gathering on April 17. Victor Besa for The National

The UAE Energy Minister will attend a meeting in Doha in mid-April aimed at "freezing" major oil producers' output, although the country seems set to resume its own production growth soon.

The UAE’s Undersecretary of Energy, Matar Al Neyadi, confirmed yesterday that the minister, Suhail Al Mazrouei, would attend the Doha gathering on April 17, although he would not be drawn on whether the UAE would agree to freeze its output.

The UAE's output dipped sharply in February, from more than 3.1 million barrels per day in January to below 2.8 million bpd, according to ministry figures provided to Opec.

The drop was because of maintenance at some of the UAE’s major onshore fields, according to industry sources.

The maintenance at fields operated by Abu Dhabi Company for Onshore Petroleum Operations (Adco) reduced production of the Murban crude grade by about 350,000 bpd, according to the sources.

Murban is Abu Dhabi’s largest stream of crude, accounting for about 52 per cent of the emirate’s output of 3.1 million bpd in January.

Adco production is expected to begin ramping back up as maintenance finishes towards the end of April, bringing its output back to normal levels of about 1.6 million bpd soon after, the sources said.

Mr Al Neyadi yesterday praised “the innovation that is transforming the energy sector”, while presenting awards at a ceremony to honour, among others, Total’s use of enhanced oil recovery techniques to boost production at Adco and Al Bukhoosh, the offshore field operated by the French company.

Adco is aiming to boost onshore production to 1.8 million bpd by the end of next year from an average of 1.6 million bpd, partly by using techniques such as reinjecting carbon dioxide into existing fields.

At the same time, Abu Dhabi’s offshore fields are on course to boost production from 1.4 million bpd to 1.7 million bpd.

This is part of the Government’s US$25 billion investment to increase the country’s overall production to 3.5 million bpd by the end of next year.

Also coming in for praise by the ministry yesterday was the Upper Zakum offshore development, which commenced its phase 2 production at the end of last year.

ExxonMobil is lead on Upper Zakum and its chief executive, Rex Tillerson, said last week that production was above 660,000 bpd, accounting for the bulk of Abu Dhabi’s 130,000 bpd month-on-month output increase in January.

Upper Zakum includes four innovative artificial islands in Abu Dhabi’s relatively shallow offshore area north of the mainland, with 173 wells and processing facilities in operation.

"The artificial island concept is saving billions of dollars in development costs by dramatically reducing the development footprint," Mr Tillerson told E&P magazine. "The production rate will reach 750,000 [early next year] and be sustained for 25 years. Beyond this we are evaluating an opportunity to expand capacity to more than 1 million bpd."

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