Abu Dhabi National Oil Company (ADNOC) has scheduled maintenance at oil fields in March and April that will cut output to meet its OPEC output reduction target.
Field maintenance is expected to reduce Murban crude exports in March and shipments for Das crude in April, three people familiar with the matter said to Reuters this week. The sources spoke on condition of anonymity as they were not authorised to discuss the matter publicly.
The United Arab Emirates (UAE) has committed to cut production by 139,000 barrels per day (bpd) in the first half of 2017 from 3.013mn bpd in October, down 4.61%, as part of a deal by the Organisation of the Petroleum Exporting Countries (OPEC) aimed at curbing global oversupply and propping up prices.
“Compliance from the core GCC members (Saudi, Kuwait, UAE, Qatar) will be strong,” Virendra Chauhan, analyst at consultancy Energy Aspects said in an e-mail, according to Reurers.
“OPEC, at least the core group, are aware they need to deliver the cuts, which will be the only way to prove the naysayers wrong.”
The emirate of Abu Dhabi is the key contributor to the UAE’s oil production in addition to Dubai where output has been declining.
It was not immediately clear how much exports might fall. One of the sources said ADNOC has also scheduled maintenance at its Ruwais refinery during the same period, which could reduce domestic demand and minimise the impact on exports. Abu Dhabi Oil Refining Company (Takreer) could not be immediately reached for comment, according to Reuters.
ADNOC agreed last month to supply some refiners in Asia with more oil above contracted volumes in February that could partly compensate for lower supplies in March and April.
Any reduction in exports of the two Abu Dhabi light crude grades could improve demand and spot prices for other similar Middle Eastern grades, a Singapore-based crude trader said.
Asian refiners could also turn to arbitrage supplies from the Atlantic Basin for replacements although Asia’s overall crude demand will be lower during the second quarter due to seasonal refinery maintenance, two traders said.
Production of ADNOC’s flagship onshore Murban crude is close to 1.6mn bpd while offshore Das crude output is near 650,000 bpd, according to industry estimates. The bulk of ADNOC’s crude is exported to Asia.
