The Hindu Business Line : UAE, Kuwait to hike oil production capacity

THE UAE and Kuwait plan to increase oil production capacity by nearly 3,00,000 bpd and 2,00,000 bpd respectively in the short term in a bid to stabilise the market, which has been rocked by high oil prices touching $53 per barrel prior to the week end.

The UAE Minister for Petroleum, Mr Obaid bin Saif Al Nassiri, told reporters at the venue of the inaugural session of the Abu Dhabi International Petroleum Exhibition and Conference, ADIPEC 2004, that the UAE also plans to increase overall capacity by 2006 from the present 2.5 million bpd to 3.5 million bpd. Kuwait's Energy Minister, Sheikh Ahmed Fahad Al Sabah, said that Kuwait would also increase capacity in the short term by 2,00,000 bpd. Kuwait currently produces 2.5 million bpd. The Kuwaiti Minister said that the high oil prices were acceptable given the political developments and tensions in some oil producing countries and elsewhere, but that OPEC would work towards bringing stability in the market.

Meanwhile, Saudi Arabia's Oil Minister, Mr Ali Al Naimi, also told newspersons that as most of the global demand was for light or sweet crude, Saudi Arabia would focus on producing and exporting more light crude to the international oil market. He did not disclose any specific figures for increased production by the kingdom. OPEC has currently increased its production ceiling at its last meeting in Vienna to one million bpd, from November 1, to reach 27 mbps (except Iraq). The UAE Minister, Mr Al Nassiri, in a statement to the conference bulletin, said that OPEC producers are currently producing to their utmost capacity and any short-term crisis would lead to a sharp price hike. The Gulf countries are investing in the oil sector to increase their output capacity in anticipation of any crisis or any world demand in the medium or long term," he said. He indicated that producers were not only challenged by maintaining stability in the oil market, but also face the problem of increasing production capacity to meet rising demand for oil, particularly from some developing countries like China and India. Over 1,200 companies are participating in ADIPEC 2004, which is being held every two years in Abu Dhabi since 1984.