UAE to cut oil production for 40 days

BARRELS REDUCED: Maintenance means reduced oil output by UAE for 40 days. (Getty Images)

OPEC-member the United Arab Emirates will reduce oil output by 150,000 to 200,000 barrels per day for 40 days in October and November for maintenance, an official at state oil company ADNOC said on Monday.

The scheduled shutdown will cut oil output from the world's fifth-largest oil exporter by up to 7.5 percent. The UAE pumped around 2.6 million bpd in June, a Reuters survey showed.

"It's for 40 days, around 150,000 to 200,000 bpd," the official at Abu Dhabi National Oil Company (ADNOC) said, speaking on condition of anonymity.

The work will cut output just as consumers' oil demand rises ahead of peak demand in the northern hemisphere for heating during winter. UAE crude is favoured by Japanese refiners making heating oil.

Buyers in Japan say the UAE has offered them more oil in September to compensate for lower volumes during the maintenance.

The offshore Lower Zakum and the Umm Shaif fields would be partially shut down, he added. Lower Zakum typically pumps at around 280,000 bpd, while Umm Shaif produces around 200,000 bpd.

Work at a gas facility on Das Island will force the shutdown, the source said. ADNOC unit ADGAS plans to shut one of three processing facilities on Das that produce liquefied natural gas (LNG) - gas chilled to its liquid form for export.

The Das facility exports around 5.5 million tonnes per year (tpy) of LNG, around 85 percent of shipments go to Tokyo Electric Power Co <9501.T> (TEPCO) in Japan.

TEPCO has been forced to increase consumption of fossil fuels for power generation to offset the loss of its Kashiwazaki-Kariwa nuclear plant, which has been shut indefinitely since a major earthquake on July 16, 2007.

ADGAS officials were unavailable for comment on Monday. It was unclear how much LNG and natural gas liquids output would be affected by the shutdown.

Das receives natural gas produced at the offshore oilfields, and the only way the UAE could continue producing oil at full tilt while the maintenance takes place would be to burn the gas.

But the UAE has a strict no-flaring policy so will limit oil output to reduce the associated flow of gas, the official said.

The fields are operated by ADMA-OPCO. State-owned ADNOC owns 60 percent of ADMA-OPCO, while the rest is held by BP, Total and the Japanese Oil Development Co.

The maintenance in 2008 will be lighter than in 2007, when work at offshore fields cut UAE output by 600,000 bpd. (Reuters)

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