The United Arab Emirates’ (U.A.E.) Oil Minister, Mohammed al-Hamli said, on Monday, that the UAE has so far kept to its targets in cutting oil supplies in line with OPEC commitments.
Minister al-Hamli said that the UAE – OPEC’s third largest producing nation – has cut its oil output in response to the cartel’s call to arms to collectively cut production by 1.5 million barrels per day (bpd). Although no figures have been released directly from the Emirates, production is thought to be down to just over 2.4 million bpd.
Although not yet at its target, the UAE has started reducing production along with other OPEC members, and is currently cutting at a rate of 134,000 bpd; a number in line with figures detailed in the group's communique resulting from the EGM on October 24.
Unlike its seemingly nervy neighbours, the UAE remains a beacon of foresight amid a cloud of Gulf oil producing nations that are currently staring a combination of falling crude prices and tightening credit, in the face.
The UAE has thrown its support behind the production-cutting policy despite a warning from Oman’s Oil Minister that the crisis will lead to project delays, such as at the the major Duqm Refining and Petrochemical Complex. Al-Hamli was quick to note that even when taking the impact of the global financial crisis on the oil induistry into account, it remained imporant for the Middle East to continue investing in the enegry sector.
While at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), Mr. al-Hamli said: “It is very important to continue investing to maintain and increase capacity in order to be prepared for the next [price] cycle.
“Investments in the oil industry are a long-term issue. Projects decided by the UAE will go ahead,” he added.
The Abu Dhabi National Oil Company (ADNOC) notified customers last week that it was set to cut its contracted volumes for its main export grades by upto 5-15% in December, and cut its Upper Zakum crude by 5% with effect from November.
OPEC’s next meeting is scheduled for December 17, in Algeria, where the cutback crude production levels will undoubtedly be reviewed.
The Organisation’s President, the Algerian Energy Minister Chakib Khelil, was quick to reassure the 13 member nations, on Sunday, that the decision to cut production levels on November 1 will not have an immediate impact upon prices.
Mr. Khelil told a local radio station that the decision: “will take a long time to take hold”; largely because the demand for oil has still not reached OPEC's revised production level.
The President added that he expected prices to drop further if the world economy continues its decline.