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UAE to cut oil output for work in Oct

Abu Dhabi, August 16, 2007

The UAE will shut around a quarter of its oil output for two to three weeks of planned maintenance in October.

The maintenance will be at two of its largest fields, a Gulf industry source said on Thursday.

The shutdown will cut output from the world's sixth-largest oil exporter by around 630,000 barrels per day (bpd), he said.

Oil traders in Asia said the total output reduction would be as high as 810,000 bpd as a third field would also undergo work.

The Opec member's output in July was around 2.54 million bpd, according to a Reuters survey.

The maintenance will hit production as demand from consumer countries for oil rises ahead of winter. The UAE's crude is a favoured feedstock for Japanese refiners making heating fuels.

Output from the Upper Zakum field will be reduced to around 180,000 bpd from around 530,000 bpd for about two and half weeks, the source said.

Output from the 280,000 bpd Lower Zakum field will be completely shut for around three weeks, he added.

'This is a planned shutdown,' he said. 'It is a synchronised shutdown because the two fields share some gas facilities.'

The shutdown would also allow progress on work to expand output from the fields, he said.

The UAE is planning to boost its output capacity to 3.5 million bpd by 2011 to 2012, from around 2.8 million to 2.9 million bpd now.

Oil traders said that additional work would take place at the 200,000 bpd Umm Shaif field that would reduce output there by around 180,000 bpd.

State oil company officials declined to comment on the maintenance plans.

Talk of maintenance over the past week has sent Abu Dhabi's main grade of light sour Murban crude to its highest premiums to the official selling price for at least eight months.

Traders have snapped up Murban cargoes for October loading at premiums of up to 45 cents and have offered cargoes at even higher prices as refiners try to boost their stocks ahead of maintenance.

Heavier Upper Zakum, which also has a higher sulphur content, and regularly struggles to attract interest, was pegged at a strong 30-cent premium to its Adnoc OSP.

Upper Zakum is the world's fourth-largest oilfield, according to operator the Zakum Development Company (Zadco).

State-owned Abu Dhabi National Oil Company (Adnoc) owns 60 percent of Zadco, while Exxon Mobil holds 28 percent.

 Lower Zakum is operated by ADMA-OPCO. Adnoc owns 60 percent of the company, while the rest is held by BP, Total and the Japanese Oil Development Co. - Reuters




Tags: UAE | Adnoc | Zakum |

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