UAE’s oil giant ADNOC has decided to step up its efforts and produce more oil, pledging to increase supply to over 4 million barrels per day in April 2020 following the collapse of the OPEC+ agreement and the oil price war between Saudi Arabia and Russia.
In a statement on Wednesday ADNOC Group CEO, Dr. Sultan Ahmed Al Jaber, said: “In line with our production capacity growth strategy announced by the Supreme Petroleum Council, we are in a position to supply the market with over 4 MMBPD in April. In addition, we will accelerate our planned 5 MMBPD capacity target.”
ADNOC also said it would provide better forward visibility to its customers and that it would shortly announce forward prices for the months of March and April 2020.
“This decision has been made to ensure that our customers have visibility of the price so they can plan accordingly,” ADNOC CEO said.
“As announced in November 2019, ADNOC remains firmly committed to moving from its current retroactive pricing mechanism to a new forward pricing mechanism for its flagship Murban crude oil. This will be traded on a new independent exchange, ICE Futures Abu Dhabi (IFAD), which is expected to launch after the necessary regulatory approvals are obtained.”
ADNOC’s decision to boost oil output comes after OPEC and Russia last week failed to agree on further production cuts in order to cope with falling global oil demand as a result of coronavirus outbreak.
OPEC suggested the extension of oil production cuts until the end of the year and further cuts until June 2020, but Russia refused to support this plan pushing OPEC to remove all limits on its own production, Reuters reported last Friday.
As a result, oil prices suffered a historic collapse last Monday after Saudi Arabia shocked the market by launching a price war against onetime ally Russia.
With the decision to increase output, UAE’s ADNOC has joined the state-run Saudi Aramco which, according to Reuters, plans to raise capacity to 13 million bpd from 12 million bpd.
Offshore Energy Today Staff
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