The Abu Dhabi National Oil Company (ADNOC), the producer of nearly all of the oil in the UAE, began producing and exporting a new crude grade, Umm Lulu, in October, an ADNOC spokesman told Reuters, in a move that will help raise the Middle Eastern producer’s exports as OPEC is relaxing the production cuts to offset lost supply from Iran and Venezuela.
The new Umm Lulu crude grade is being pumped from the offshore fields Umm Lulu and SARB, operated by ADNOC offshore in partnership with foreign oil companies.
One of them, Austria’s OMV, said that the initial capacity of the two fields is 50,000 bpd, which will increase to 129,000 bpd by the end of this year, and then to 215,000 bpd by 2023. OMV was awarded a 20-percent stake in the 40-year offshore concession in April this year for US$1.5 billion.
According to trade sources who spoke to Reuters, ADNOC has already sold two cargoes of 500,000 barrels each of the Umm Lulu crude grade for November loading to the second biggest refiner in South Korea, GS Caltex, and to India’s Reliance Industry.
Reliance has halted imports of oil from Iran, so it has to look for other options and is taking more crude from the Middle East and from the United States, an executive at Reliance told Reuters on Wednesday.
As of early September, the UAE already started ramping up production to 3 million bpd, thanks to the Umm Lulu and SARB fields.
ADNOC has a target to have production capacity of 3.5 million bpd by the end of this year.
According to OPEC’s secondary sources, the UAE’s oil production in September averaged 3.004 million bpd—up by 30,000 bpd from August.
Last month, OPEC’s biggest producer Saudi Arabia also opened up the taps to add 108,000 bpd of production, lifting output to 10.512 million bpd, as the cartel and its key partner in the production cut deal, Russia, moved to offset losses in Iran and Venezuela.
By Tsvetana Paraskova for Oilprice.com
ADVERTISEMENT
More Top Reads From Oilprice.com:
- Iran Sends Record Amount Of Oil To China
- U.S. And Europe Divided On The Future Of Oil
- Saudi Arabia Calls The End Of Russia’s Oil Prowess
