ABU DHABI AND SAUDI CLINCH LANDMARK GAS DEAL

Announcement of co-operation agreement on first day of Adipec

Abu Dhabi National Oil Company and Saudi Aramco have signed an agreement to explore joint investments in natural and liquefied natural gas.

The agreement is just one of a host of pacts that were signed during the first day of the Abu Dhabi International Petroleum Exhibition and Conference.

The four-day event is hosting more than 10,000 delegates and 2,200 exhibiting companies, including about 40 national oil companies.

Adnoc and Aramco are looking to boost revenues with natural gas and LNG.

The agreement comes after Adnoc’s oil and gas discovery this month, when Abu Dhabi announced it had found 15 trillion cubic feet of gas in existing and untapped blocks.

The find will help the UAE’s vision to become self-sufficient with gas, and eventually a net exporter, and will be a 7.1 per cent addition to the country’s existing reserves, the latest BP Statistical Review of World Energy shows.

The UAE and Saudi Arabia are members of Opec which, along with a group of non-member countries led by Russia, helped to create a balance in crude markets through a global pact to cut output of 1.8 million barrels of oil a day from January last year to the first half of this year.

Now Opec-plus, as the alliance is called, is taking steps to balance the market again after their reversal of cuts in the second half of this year.

The increased supply from Opec coincides with US production rising to a record high of 11.6 million barrels a day, outstripping production in Saudi Arabia and Russia.

The glut has pushed down prices to less than $70 a barrel last week from more than $85 a barrel in October.

Opec and its allies could cut 1 million bpd next year if needed, Saudi Oil Minister Khalid Al Falih told a panel at Adipec.

Adnoc yesterday also signed a preliminary agreement with the Indian Strategic Petroleum Reserves to explore the possibility of storing its crude at the company’s underground oil complex.

The agreement, signed during Adipec, follows the arrival on November 4 of the final shipment of the initial delivery of Adnoc crude to be stored in another of the company’s underground facilities in Mangalore

Adnoc and Saudi Aramco are co-investing in a $44 billion (Dh161.62bn) refinery and petrochemicals project in India, which will have a capacity of 1.2 million barrels a day.

Adnoc’s latest agreement is just one of several projects being undertaken by the company to boost its output and guarantee sales of its crude.

It is linking up with companies including BP to achieve its targets.

The British major plans to spend $1bn a year in Abu Dhabi as it looks to expand its operations in the Middle East after new discoveries and licensing rounds, its chief executive Bob Dudley told The National yesterday.