Al Nassiri - UAE to lift oil capacity to 3.5 mbd by 2006

The call came after the inauguration of ADIPEC 2004, the 11th edition of the Abu Dhabi International Petroleum Exhibition and Conference, which is being held under the patronage of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and Chairman of the Supreme Petroleum Council.

His Highness Lt. General Staff Pilot Sheikh Mohammed Bin Zayed Al Nahyan, Deputy Crown prince of Abu Dhabi, Chief of Staff of the UAE Armed Forces, and Chairman of the General Exhibition Corporation (GEC) inaugurated ADIPEC 2004 earlier today.

Obeid Bin Saif AL Nassiri, the UAE Oil Minister said, "ADIPEC is considered to be one of the biggest specialized events for the oil and gas industries and provides a great opportunity to international experts and decision-makers to meet under one roof."

He added that the event was a great opportunity for business deals between exhibitors from all over the world who were showcasing their products and services. Al Nassiri anticipated that the UAE would sign major deals in this exhibition. He also said that the international oil market was very sensitive and any statements that are made can impact the market significantly. "Nevertheless, the fluctuations that the market is going through is temporary and will not last long." He hoped that the prices will stabilize once the regional and international political situation stabilizes. He also said that the UAE plans to increase its oil production capacity to reach 3.5 million barrels per day (MBD) by 2006 from 2.5 mbd today.

Sheikh Fahad Al Ahmad Al Subah, the Kuwaiti Oil Minister who was present at the inauguration said, "The oil fluctuation is developing into a very dangerous one. The current rise in oil prices are not linked to supply and demand forces but to the current security and political situation in the area and the international situation in Russia and Nigeria". Al Subah added that OPEC is seeking to ease the impact of steep rise in oil prices. "Kuwait is committed to OPEC policies and is producing 2.5 mbd and we are willing to produce 200,000 barrels more per day. There are no shortages in oil supplies he said and added that the increase in oil prices is due to fears of future shortage that may occur due to the deteriorating security situation.

Al Subah considered the call from some quarters to maintain the OPEC capacity without hiking it as non-practical as it is a short-term solution and wouldn't benefit the international economy in the long-term. He added that it was very hard to speculate on the market situation or the price levels because of the incidents in the Middle East. As per the current solutions, Kuwait will be producing an additional 200,000 barrels per day said Al Subah.

In addition he also said that the increase in output promised by Saudi Arabia to meet the expected demand in the final quarter of this year due to the increased consumption of fuel for heating in the winter months, would definitely help the situation.

He added that OPEC in their meeting in Saudi Arabia next Sunday will discuss rising prices of oil as well as the impact on the international market. He also said that discussions would involve the possibilities of changing the range of these (high) prices to between $32 to $35 per barrel.

On his part Al Nuaimi, the Saudi oil minister said, "The OPEC countries are doing their best to meet the increasing international demand. Saudi Arabia is prepared to increase its production capacity by a million barrels per day if needed. Saudi is producing more than 11 mbd and will therefore be in a position to produce 12 mbd". Al Nuaimi also said that there are current development plans underway for oil fields and increased production capacities and that Saudi will dedicate some of its production as ready reserves to be pumped in the international market if needed.

He said that Dolphin Gas project between the UAE and Qatar is going on as planned emphasizing his expectations that there would be an opportunity to establish mutual oil and gas projects in the future.

Dr. Rashid Saleh Barbah, the Yemeni Oil Minister and Mr. Amanullah Khan, the Pakistani Oil Minister who were present on the occasion commended the great competence with which ADIPEC had been organized.