In the debate over the impact of fracking on the global energy industry, Abu Dhabi has stuck to a line also articulated by the Saudi oil ministry: the more supply, the better.
UAE unfazed by shale revolution
The UAE has a clear message for those who believe the shale revolution in North America will challenge Opec’s status as supplier of 40 per cent of the world’s oil.
“This is a great thing for all human beings and all industries and our business,” Ali Al Yabhouni, the UAE’s Opec governor, said yesterday.
“I don’t understand why some people look at this as a threat at Opec producers.”
In the debate over the impact on the global energy industry from fracking, both in the United States and in newer players such as China and Poland, Abu Dhabi has chosen to stick to a line also articulated by the Saudi oil ministry: the more supply, the better. Matar Al Niyadi, the UAE undersecretary of energy, said at yesterday’s forum that shale gas could help to speed the adoption of cleaner fuel in power generation and other industries.
“We believe that if progress in the production of shale gas is to be continued, it will have a positive effect on the stability of gas prices, which would help the usage of gas in a wider area such as increasing its use in the production of electricity or in the transportation sector,” Mr Al Niyadi said, in a speech delivered on behalf of the UAE Minister of Energy, Suhail Al Mazrouei.
The UAE’s message comes as the US, aided both by a decrease in domestic oil consumption and the extra supplies from shale, whittles its oil imports to a 16-year low, according to data out this month from America’s Energy Information Administration.
Meanwhile, American exports of refined products such as petrol have climbed by more than 60 per cent since 2010, to 1.7 million barrels per day.
Abu Dhabi is increasing its production capacity to 3.5 million bpd by 2017 from 3 million today, and is also more than doubling its refining capacity from 415,000 bpd currently.
“That should send a signal that there will be security of supply and Opec countries are acting as responsible suppliers,” Mr Al Yabhouni said.
Shale oil would also not compete with conventional oil and thus would not lower oil prices, said Mr Al Niyadi in his speech on behalf of Mr Al Mazrouei.
“The rise in the cost of production of shale oil and the environmental effects associated with it show that the production procedure may face significant challenges or be on a smaller scale, thus disqualifying it from competing with conventional oil production.”