Abu Dhabi - Part 2 - Profiles Of The Oil & Gas Fields And Their Operators.

Abu Dhabi now has the capacity to produce more than 2.5 million b/d of crude oil, compared to 2.37 million b/d at end-1996 and 1.83 million b/d in 1990/91. Most of Abu Dhabi's oil and gas fields are being expanded, so that total capacity could reach more than 3 million b/d by 2001. In the Abu Dhabi National Oil Company (ADNOC), upstream experts say this capacity will be sustainable for several years, rather than for 12 months. Abu Dhabi's actual oil production has been limited to about 1.88 million b/d, excluding condensates, because under OPEC's agreement the UAE's share is 2.157 million b/d. As Dubai and Sharjah do not adhere to OPEC agreements, Abu Dhabi has to act as a swing producer and the two smaller emirates' combined oil output now is averaging about 275,000 b/d excluding condensates. Six major fields in Abu Dhabi, three onshore and three offshore, account for the bulk of the emirate's oil and gas production and their oil is of high quality. Unlike the bigger GCC neighbours and other OPEC members, Abu Dhabi has foreign partners sharing its burden in funding capacity expansions. They provide the best technology in the industry. ADNOC has a programme for 1996-2000 to expand its upstream and downstream production capacities, with major petrochemical ventures being built at Abu Dhabi's industrial zone of Ruwais (see Downstream Trends). ADNOC may consider proposals to extend its LNG export venture from the current nominal capacity of 5.3 million tons/year to 8 million t/y, if this proves feasible early in the next decade. It is to export 500 MCF/day of gas to Dubai by pipeline from 2001 and the volume will rise later to 800 MCF/day. (see exports in Part 3). After restructuring in October 1998, ADNOC now has eight directorates functioning as autonomous divisions. Of these, five operating directorates were created in October, with each in charge of a sector and subsidiary companies: (1) the E&P Directorate, under Abdullah Bin Nasser Al Suwaidi; (2) the Gas Processing Directorate, under Rashid Bin Saif Al Suwaidi, who is also responsible for the onshore NGL/LPG joint venture Gasco, the LNG joint venture ADGAS, and the new wholly-owned Abu Dhabi Gas Processing and Pipelines Co. (Gappco) which is headed by Mohammed Bin Rashid Al Otaiba; (3) the Chemicals Directorate under Abdullah Bin Said Al Badi, responsible for Borouge olefins project (60% ADNOC & 40% Borealis) and fertiliser producer Fertil; (4) the crude/products Marketing and Refining Directorate under Mohammed Al Hamli, responsible for the new Refining Co. (Refco) which is headed by Ali Bin Said Al Badi (previously head of crude oil marketing); and (5) the Services Directorate (see Who's Who in Part 4). Abu Dhabi's recoverable oil reserves are estimated at 92 billion barrels, and there are more than 200 billion barrels of oil in place in the emirate yet to be appraised for future development. To compare, the recoverable reserves of the other UAE emirates are less than 6 billion barrels. Expansion of the gas sector is the focus as local demand is expected to rise rapidly in the coming years. Gas development and gathering projects worth over $2.1 bn were awarded in 1997-98, with a $1 bn contract to be awarded in 1999. ADNOC is considering a plan, likely to cost almost $7.5 bn, to develop sour gas in the Hail, Shah and Bab fields to produce a total of 2,300 MCF/day by 2007, when local demand could have doubled to 5,000 MCF/day. ADNOC, fully owned by the emirate, is in charge of the hydrocarbon sector in Abu Dhabi. The partners in its main oil producing subsidiaries are grouped in two consortia: Abu Dhabi Company for Onshore Oil Production (ADCO), and the Abu Dhabi Marine Areas Operating Co. (ADMA-OPCO). The two groups include the world's biggest multinationals. The smaller producers in Abu Dhabi involve important Japanese companies (see profiles on the following pages & in Gas Market Trends).

ABU DHABI SUSTAINABLE OIL PRODUCTION CAPACITY 1990-2001
1990/1    End-98  By 2001*            API      Sulphur
Onshore      Operator  000 b/d  000 b/d  000 b/d  Gravity   % Weight
Bab**           ADCO     150      330      350     40.6 deg.    0.8
Bu Hasa**       ADCO     400      510      680     39   deg.    1
Asab**          ADCO     280      330      450     40.8 deg.    0.75
Shah**          ADCO      15       30       62     39   deg.    0.7
Sahil**         ADCO      15       55       70     39.7 deg.    0.7
Jarn Yaphour    ADCO      --       10       10     39   deg.    0.8
3 New Fields**  ADCO      --       10       50     n.a.         n.a
Total ADCO               860    1,275    1,672
Offshore
Umm Shaif    ADMA/OPCO   250      265      280     37   deg.    1
Lower Zakum  ADMA/OPCO   270      300      330     39   deg.    1
Total        ADMA/OPCO   520      565      610
Upper Zakum    Zadco     330      540      600     35   deg.    1.8
Umm Al Dalkh   UDECO      20       25       25     32.5 deg.    1.6
Satah          UDECO      15       20       20     39.8 deg.    1
Abu Bukhoosh   Total      40       50       50     32   deg.    1.8
Arzanah        A. Hess    20       20       20     44   deg.    0.8
Mubarraz       ADOC       20       20       20     37   deg.    1.6
Umm Al Anbar   MOCO        5       10       10     36-37deg.    1+
Grand Total            1,830    2,500    3,007

* The estimate for 2001 is based on ADNOC proposals. ADNOC has asked ADCO to raise its capacity to more than 1.66 million b/d by 2001. But ADCO's foreign partners are reluctant in view of OPEC quota limitations as the company's production at present is way below its capacity. ADNOC has also asked ADMA/OPCO to raise its capacity to 650,000 b/d and, there again, the foreign partners are reluctant. ADNOC hopes Upper Zakum's capacity would reach 750,000 b/d by 2001 and this field gets a priority in production allowables. **Bab, Bu Hasa, Asab, Shah and Sahil form ADCO's Murban system. The Murban blend of export crude is 40.4 deg. API with 0.8% sulphur. The three new fields developed by ADCO are Zubbaya, Rumaitha and Shanayel. Originally, in 1991, ADCO planned to develop these fields on a larger scale so that their combined capacity would reach 150,000 b/d by 2000. Their development was scaled down because of quota limitations, but if ADNOC raises ADCO's production allowable the company would expand their capacity to that level. By mid-1996, Abu Dhabi's gas production capacity had reached more than 4,000 MCF per day, compared with a little over 2,000 MCF/day in 1994 and about 1,800 MCF/day in 1992. By 2001, the gas production capacity will reach more than 6,000 MCF/day. Abu Dhabi's recoverable reserves of natural gas are officially estimated at 190 TCF (5.7 TCM), with more to be found and proven in the future. To compare, proven recoverable reserves of natural gas in the whole of the UAE are less than 205 TCF. However, a big part of Abu Dhabi's reserves is associated gas dependent on oil production. The large non-associated gas fields are offshore. Most gas fields have high sulphur content, with the cost of extracting and processing sour gas being very high. Abu Dhabi's capacity to produce condensates has increased from 40,000 b/d in early 1994 to 171,000 b/d now. By 2001 the condensate production capacity will reach more than 300,000 b/d. Condensates, NGLs and LPGs are excluded from the OPEC quota system. During the Gulf crisis, from Iraq's invasion of Kuwait in August 1990 to the US-led war against Iraq in early 1991, Abu Dhabi's oil production was maximised. At one time it peaked at more than 2.3 million b/d. Dubai's production then was about 420,000 b/d. Saudi Arabia also produced at a maximum rate at the time.