By Indrajit Sen
UAE was the third-largest contributor to oil production from OPEC last month
The UAE could expand oil production by up to 30% by 2020 using expensive Enhanced Oil Recovery (EOR) techniques, a US federal review has said.
"EOR is an expensive process, and at current prices, these projects may not be economic," the US Energy Information Administration (EIA) stated in its report. "However, despite today's low oil prices, the UAE continues to invest in future production."
The Upper Zakum oilfield is one region that has been targeted for further development. The field is the second-largest offshore oilfield and fourth-largest oilfield in the world, and it currently produces about 590,000 barrels per day (bpd).
In July 2012, the Zakum Development Company awarded an $800m engineering, procurement, and construction contract to Abu Dhabi's National Petroleum Construction Company, with the goal of expanding oil production at the Upper Zakum field to 750,000 bpd by 2016.
Production from the Lower Zakum field should also increase, with oil production eventually reaching 425,000 bpd, an increase from the current level of 345,000 bpd.
The UAE was the third-largest contributor to oil production from the Organisation of Petroleum Exporting Countries (OPEC) last month. September oil production of 2.9 million barrels per day represented a 0.8% increase from the previous month.
The UAE also produced 1.9tn cubic feet (tcf) of natural gas in 2013. A top-20 global natural gas producer, the UAE also holds the seventh-largest proved reserves of natural gas in the world, at slightly more than 215tcf.
Despite its large reserves, the UAE became a net importer of natural gas in 2008 as a result of two things: the UAE re-injected approximately 30% of gross natural gas production in 2012 into its oil fields as part of EOR techniques, and the country's rapidly expanding electricity grid relies on electricity from natural gas-fired facilities.
To help meet growing internal natural gas demand, the UAE has increased imports from Qatar and plans to increase domestic natural gas production.
However, the UAE's natural gas has a relatively high sulphur content that makes it difficult to process, making it hard for the country to develop its extensive reserves.
Advances in technology and growing demand have made the UAE's reserves an economic alternative to imports from Qatar, and UAE has several ongoing projects that will increase the country's production in coming years.
The UAE has also announced its intention to expand non-oil energy assets, in an attempt to reduce reliance on natural gas for power.