According to a report from the U.S. Energy Information Administration, the UAE government plans to expand production 30% by the year 2020 using enhanced oil recovery. EOR is an expensive process, which may not be favorable in today’s economy. However, the UAE continues to invest in present and future production and feels confident on their return.<!–more–>
The report went on to say, “advances in technology and growing demand have made the UAE’s reserves an economic alternative to imports from Qatar, and UAE has several ongoing projects that will increase the country’s production in coming years.”
The expansion is expected to increase production to these levels by the year 2020 and is targeted towards the Upper Zakum oilfield, located north of the country. It is the second largest offshore oilfield and fourth largest oilfield on the globe. Currently, 590,000 barrels per day are being produced from it, and a contract to Abu Dhabi’s National Petroleum Construction Company was awarded for $800 million in 2012. The goal is to expand oil production in the field to 750,000 barrels per day by 2016.
Oil production from the Lower Zakum field is also expected to increase to oil production eventually reaching 425,000 barrels per day from the current production level of 345,000.
“There is a forecast that oil price is going to increase. My colleague, the minister of energy, has indicated several times that they look at $80 (per barrel) as an ideal price for oil as we go on in the next phase,” said UAE Economy Minister Sultan Bin Saeed Al Mansouri. “The UAE for a long time has managed to develop quite a sophisticated diversification of the economy and we also have a plan to reduce reliance on oil by up to another 10% in the next 15 to 20 years. It depends at the end of the day on the performance of the economy as a whole.”
The UAE is the world’s sixth largest oil producer and the second largest producer of petroleum and other liquid fuels in OPEC, trailing behind Saudi Arabia. The country has also announced its intention to expand other non-oil energy assets in an attempt to combat its current reliance on natural gas for power.
Lilia Fabry is the owner of MPP Freelance, a writing and web design firm in Houston, TX.