ABU DHABI - Part 3 - The Oil Exports & Logistics.

Abu Dhabi's crude oil exports average 2 million b/d, up from 1.675m b/d in early 1999 and 1.72m b/d in the first quarter of 1997. In addition, its exports of refined oil products beyond the UAE average about 335,000 b/d, up from 95,000 b/d in early 1999. Sales of products locally and to the other UAE emirates total around 150,000 b/d.

The last peak in Abu Dhabi's exports occurred in October 1990 when, at the height of the Gulf crisis, the emirate had to pump out more than 2m b/d of oil. Exports declined to 1.7m b/d in 1992 and fell to nearly 1.65m b/d in 1993. In 1994 they averaged 1.7m b/d. In 1995 they rose to 1.85m b/d. To compare, total oil exports in 1988 did not exceed 900,000 b/d and averaged about 1.23m b/d in 1989.

About 60% of Abu Dhabi's oil exports go to Japan and a further 20% go to other Far Eastern markets. The Japanese market absorbs most of its exports of LNG, LPG and condensates. The capacity to produce LNG on Das island for export has more than doubled. From 2.3 million tons/year, the nominal capacity in late 1994 reached 4.9m t/y. But actual output of LNG averages 5.3m t/y. With Tokyo Electric Power Co. (Tepco) buying less than 5m t/y under a 25-year contract, the surplus is being sold on spot basis to Western markets (see Gas Market Trends of this week).

Abu Dhabi's share of crude oil exports exceeds 1m b/d. This is tied up by term contracts handled by the Marketing and Refining Directorate of the Abu Dhabi National Oil Company (ADNOC), which has been restructured (see who's who in Part 4).

Like most other NOCs of the Middle East, ADNOC seldom engages in spot trading. But its foreign partners in E&P ventures - such as BP, TotalFinaElf, Shell, ExxonMobil and Japanese companies - have established a spot market for Abu Dhabi crudes. Some of these companies also buy a part of ADNOC's share of oil production on term basis and trade the crudes on the spot market. The number of spot deals in Abu Dhabi crudes done by these companies has increased in recent years.

ADNOC has a pragmatic management authorised by the Supreme Petroleum Council (SPC) to widen and consolidate Abu Dhabi's share of the oil markets. It maintains direct relationships with refiners using Abu Dhabi crudes on both sides of Suez, including firms in which ADNOC has a stake acquired through the emirate's International Petroleum Investment Co. (see Downstream Trends).