Onshore oil boost for Abu Dhabi

The largest sheikhdom in the UAE - Abu Dhabi, is to award nearly US$2 billion in onshore oil contracts as part of an effort to boost crude production capacity by 2010 to 3.5 million barrels per day.

State controlled Abu Dhabi Company for Onshore Oil Operations (Adco), aims to award a US$1.5 billion engineering and construction contract at the Bab and Qusahwira fields this month, said Abdul Munim Saif al Kindy, general manager of the company.

And it will award a US$300 million contract for development of the Bida Al Qemzan area.

Increase in demand

Arabian Gulf producers want to increase capacity, as they expect demand will recover after the global economic slump effected fuel consumption.

Saudi Arabia, the largest OPEC producer, has expanded its capacity to more than 12 million barrels a day and kept a third of that idle amid low demand.

Adco will raise its sustainable production capacity to 1.8 million barrels a day from 2017 from about 1.4 million barrels per day.

The rest of the output increase to reach the emirate's 3.5 million barrel a day capacity goal will come from offshore fields operated by other units of state ownedAbu Dhabi National Oil Co, Adco's biggest shareholder, Arabian Business reports.

The UAE holds around eight percent of the world's crude reserves with most of that in onshore and offshore deposits in Abu Dhabi.

Adco last year awarded US$3.5 billion in contracts to develop the Asab, Shah and Sahil fields to Petrofac Ltd, Tecnicas Reunidas SA, and Consolidated Contractors International SAL, which will add around 225,000 barrels of daily production capacity by 2012.

Global oil demand will reach 120 million barrels a day in 20 years, from about 87 million barrels a day now, al Kindy said yesterday.

Saudi Arabian Oil Co, the world's biggest producer, is pumping more than eight million barrels of oil a day and has spare capacity of about four million barrels a day, chief executive officer Khalidal Falih said last month at the World Economic Forum in Davos.

Global demand will grow by one million barrels a day and reach 105 million barrels a day by 2030, al Falih said.

Adco will look to keep capacity at 1.8 million barrels for 25 years, in part by developing marginal fields, or deposits that aren't yet economically viable, al Kindy said.

The company is seeking to cut production costs for such deposits, which are now more than US$10 a barrel, to make them profitable.

 

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