The United Arab Emirates (UAE), one of OPEC's key members, is accelerating plans to raise its oil production capacity to 5 million barrels per day (bpd) five years earlier than planned, Bloomberg reported on Monday, quoting sources with knowledge of the new plans.
The UAE is thought to be one of the only two oil producers in the world-together with Saudi Arabia-with some spare oil production capacity currently left.
Abu Dhabi National Oil Company (ADNOC) has had for years planned to boost its oil production capacity from 4 million bpd currently to 5 million bpd by 2030.
But now ADNOC, which produces nearly all the crude in the UAE, is moving that target date forward to as soon as 2025. The company and the UAE had considered moving the target ahead to 2027 from 2030, but now they are reportedly planning to have the capacity raised by 1 million bpd by 2025.
ADNOC and the UAE could thus take advantage of still rising global oil demand and high oil prices before consumption is expected to plateau at some point in the 2030s, according to most estimates.
However, accelerating the increase in oil production capacity could be a very costly endeavor, according to Bloomberg's sources.
"As we embrace the energy transition and future-proof our business, we will continue to explore potential opportunities that can further unlock value, free up capital and enhance returns," Adnoc said in a statement to Bloomberg, without commenting on whether the 2030 target for 5 million bpd production capacity had been changed.
The UAE is considered one of the very few oil producers currently capable of ramping up production using some spare capacity left. However, with global spare capacity at critically low levels, neither the UAE, Saudi Arabia, or OPEC, for that matter, are in a rush to use more of their spare capacity, especially in view of many uncertainties in global oil demand in the short term.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More