Source: Emirates 24|7
Abu Dhabi has boosted investment in its massive hydrocarbon sector by nearly six times to a record high in 2010 as the emirate is pushing ahead with mega projects to expand the industry, according to official data.
From around Dh7.2 billion in 2005, the gross fixed capital formation (investments) in the oil and gas sector edged up slightly to around Dh7.8 billion in 2006 and Dh8.5 billion in 2007 before it began its rapid climb in the following years. It leaped to Dh18.5 billion in 2008 and around Dh33.9 billion in 2009 before hitting an all time high of Dh43.7 billion in 2010.
“The sharp rise in investments in the oil sector was due to an increase in spending on oilfield development plans as well as a large rise in investment in fixed assets in oil equipment,” the Abu Dhabi Department of Economic Development said in its 2010 report.
It showed the surge allied with higher crude prices to boost the hydrocarbon sector’s contribution to GDP to Dh308 billion in 2010 from Dh15.5 billion in 2005, an average annual growth of around 7.4 per cent.
The report showed the price of OPEC’s basket of crudes averaged nearly $77.45 a barrel last year compared with $61.06 in 2009. It estimated the oil sector’s share of the emirate’s GDP at around 49.7 per cent in 2010.
Abu Dhabi is the main oil producer in the UAE, which aims to boost its crude output capacity above three million barrels per day in the next few years.
Official figures showed Abu Dhabi alone is pumping more than $10 billion during 2005-2011 into crude capacity expansion projects, which target both its onshore and offshore areas, mainly the super-giant Upper Zakum and other major fields.
Around $1.5 billion (Dh5.5 billion) would be spent on the development of the offshore Upper Zakum to add 200,000 bpd to its 550,000 bpd capacity.
An equivalent sum has also been allocated for the expansion of the mammoth Umm Shaif offshore field and $two billion for the Nasr Field development by the Abu Dhabi Marine Oil Company (ADMA-OPCO).
The Abu Dhabi Onshore Oil Company (ADCO), one of the largest 10 oil companies in the world, is investing nearly Dh5.5 billion into its Phase 1 Development Programme, which will add about 400,000 bpd to its output.
The projects are part of an ongoing programme by the UAE, a key OPEC member, to expand its sustainable crude oil capacity, which official sources estimated at nearly 2.8 million bpd at the end of 2010.
While such projects will boost capacity to well above three million bpd in four years, there are plans to push ahead with expansions to reach 3.5 million bpd in the long term to tap the country’s massive hydrocarbon reserves of nearly 98.7 billion barrels, more than eight per cent of the world’s total proven oil wealth.