UAE to shut oil output in Oct-Nov

[LRE]

UAE to shut oil output in Oct-Nov

* Shutdown will cut its oil output by up to 7.5 percent

DUBAI: 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 OPEC-member 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 consumer 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.

Refiners 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 Umm Shaif fields will be partially shut down, the official added. Lower Zakum typically pumps at around 280,000 bpd, while Umm Shaif produces around 200,000 bpd.

Japan gas imports: 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.

Das receives natural gas produced at the offshore oilfields, and the only way the UAE could continue producing oil at full tilt during maintenance would be to burn the gas. But the UAE has a strict no-flaring policy so will limit oil output to reduce the associated gas flow, the official said.

The Das facility exports around 5.5 million tonnes per year (tpy) of LNG, and around 85 percent of shipments go to Tokyo Electric Power Co (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. The Lower Zakum and Umm Shaif 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. News of the maintenance had little impact on the spot oil market, but it could support prices in the next few weeks. reuters

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