The UAE has produced 103,000 b/d above its Opec+ quota in August because of domestic power demand, but will compensate by lowering output in October, energy minister Suhail al-Mazrouei said today.
"While the UAE's production increased to 2.69mn b/d in August, measures have been taken to compensate for this temporary increase due to peak summer electricity demand in the [country], which required an increase in oil production and associated gas," Mazrouei said. The UAE has a production quota of 2.59mn b/d under the latest Opec+ supply deal.
The extra output in August, along with lower refinery runs as a result of reduced domestic demand and stock drawdowns, led to an increase in exports, a source close to state-owned Adnoc said.
This comes at a time when the Opec+ group pushes for 100pc compliance with the deal and for countries to make up for any overproduction. The 23-member alliance eased its collective output cut from 9.7mn b/d in May-June and 9.6mn b/d in July to 7.7mn b/d for the rest of this year.
But Mazrouei assured that the country remained "fully committed to the Opec+ agreement, as illustrated in June when we cut an additional 100,000 b/d from our agreed quota".
The UAE sits on the alliance's Joint Ministerial Monitoring Committee (JMMC) which oversees adherence to quotas. The committee will meet again on 17 September.
State-owned Adnoc has notified its term customers that a 30pc nomination cut will be applied to all grades — light sour Murban crude, Das and Umm Lulu, and medium sour Upper Zakum — in October, according to Mazrouei. This is much deeper than the 5pc cuts it imposed for its term crude exports for July-September. The firm produces nearly all of the UAE's crude oil.
(www.argusmedia.com, 1 September, 2020)
