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Sunday, April 30, 2017
The UAE sees a healthy level of demand for crude oil in the future from emerging economies in Africa and Asia and the country will remain commercially-minded in its strategic oil investments, said Suhail bin Mohammed Faraj Al Mazrouei, UAE Minister of Energy.Al Mazrouei’s comments came during a session on the region’s oil policy moderated by Richard Mably, global commodities editor at Reuters News, and organised by global information provider Thomson Reuters on the occasion of the 150th anniversary of its presence in the Middle East and North Africa (MENA) region.He said the UAE was satisfied by the high level of compliance with the current agreement by OPEC and non-OPEC countries to cut back oil production, and that this compliance would have a direct bearing on the general positive movement non-OPEC partners in the agreement.In light of the current agreement to reduce oil production, Al Mazrouei noted that the market is now correcting itself, and that a combination of healthy demand for oil with an expectation of crude stocks declining over a period of time would help maintain the market’s balance.He said the UAE had reduced its oil production by over 200,000 barrels per day in March compared with October 2016 and is complying 100% with the output-cutting deal. The Emirati minister also said that any decision to extend the deal beyond six months would be up to all producers. “We are happy with the performance of the commitment. We still have gave two months to evaluate and decide. I hope that we would get together to form a single opinion,” Al Mazroui said.“The world has changed, and now we are in an environment where we need to work together to achieve a single opinion that will benefit global markets,” said Al Mazrouei. “We see an evolved relationship with oil consumer nations, many of whom have become investors and partners in upstream oil production.”In response to a question on whether consumers can tolerate higher oil prices, Al Mazrouei explained that the priority was for a stable oil market at the right price that serves market demand and incentivises the continuity of production, while balancing the depletion of oil reservoirs and the need to sustain investment in the upstream sector.The minister added that planned investments in the oil sector were relatively low, noting that the lag time needed for such substantial projects to come online means that there need to be incentives to attract future investments.Minister Al Mazrouei reaffirmed the collaborative relationship between OPEC and non-OPEC producers to ensure achievement of fair prices for both consumers and producers. “The shift in oil market forces means that OPEC no longer needs to be immediately reactive to market changes,” Al Mazrouei said.“We favour a more contemplative and cooperative approach that achieves fair prices, stability, and sustainability for the sector.” He added: “Rather than concentrating on price, it is more important to concentrate on efficiencies in production that help reduce costs and improve margins for producers.”The minister stated that the UAE would continue to pursue its commercial interests in oil and gas investments, and that its planned increase in oil production capacity to 3.5 million barrels per day by 2018 was part of the UAE’s strategy to have a sufficient buffer that allows it flexibility in the market, thereby avoiding any shocks to oil markets.
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