UAE to invest over $50 bln in oil and gas sector
Posted: 31 December 2007
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The UAE is planning to pump over $50 billion into projects in the next five years to expand its oil and gas production capacity to face a steady growth in domestic and external demand, according to a Gulf bank report.
Some of the projects have already got under way and they include field development, pipelines, refineries and other sectors, said the report by the National Bank of Kuwait (NBK), citing UAE official figures.
“The UAE has undertaken several projects intended to boost its oil and gas production capacities and upgrade refinery infrastructure to meet external demand and the fast rising domestic consumption,” it said.
“Over the next five years, more than $50 billion in funds have been earmarked for field development projects, capacity enhancement and oil and gas pipeline networks, which should raise oil and gas production capacity a further 30% to 4 million barrels per day and 6.5 billion cubic feet per day, respectively, by 2012.”
It said the expansion programme includes around $10 billion already earmarked by ADNOC to raise the production capacity of Upper Zakum , Abu Dhabi ’s largest oil field, from 550 bpd to 750 thousand bpd.
It also includes the $10 billion Sour Gas Development (SGD) project that aims to develop reserves on the onshore Shah and Bab fields, which should add nearly three bcfd to the existing output capacity.
“Thirteen international companies are bidding for the SGD project, reflecting the strong appetite for this significant though costly gas reserve. There is also the Dolphin project, a $5 billion initiative that aims to transport gas from Qatar 's North field by sub-sea pipeline,” the report said.
The project started piping its first gas deliveries in 2007 and supplies are expected to reach a total of 2 bcfd by early 2009.
The expansion strategy also includes plans to strengthen downstream production capabilities and to enhance the value of energy exports.
“But the escalating cost of production and near-term restrictions on manpower, materials and services, are likely to stretch the anticipated timeline by several years at least. Moreover, developing further fields will be more difficult as they may need more challenging recovery techniques,” the report noted.
“Nonetheless, the oil and gas sector attracts large investments, with a rising share shouldered by the private sector (almost $16.7 billion). The biggest publicly-funded project is the field development undertaken by ADCO in Qusahwira, Ruwais and Bida Al Qemzan, with a value of $1.5 billion.”
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