UAE - E&P Constraints.

Finding and developing a super-giant in Abu Dhabi has been a problem because of OPEC quota limitations or government constraints. An example was the case of Upper Zakum, which ADNOC developed on its own in the 1970s at a cost believed to be about $7 bn. The capacity target was 1m b/d. Because of quota limitations, the field's output was way below capacity and this affected its complex reservoir.

Giant fields could be seriously affected if their production rate is cut by more than half. Such problems were encountered in the 1980s in other OPEC countries as well. They have been faced by ADMA-OPCO in recent years, as its fields' maximised production rate has caused them to decline from 600,000 b/d in late 2002 to about 470,000 b/d at present. ADMA-OPCO is spending heavily to restore its sustainable capacity to 600,000 b/d in the next two years.

In contrast, a small field is more likely to be allowed early production as this can be achieved without impinging unduly on existing producers. Since the early 1980s, small fields in Abu Dhabi have become attractive, as in the case of fields developed by the Japanese companies (see background in Vol. 60).

Under the terms of the oil E&P, as in other countries, any gas found in the course of oil exploration becomes government property, owned by ADNOC. Foreign partners do not pay for gas re-injected into the fields, but they share with ADNOC the cost of EOR installations.