Dubai- UAE Minister of Energy Suhail al-Mazrouei said that he sees a healthy level of demand for crude oil in the future from emerging economies in Africa and Asia and that the UAE would remain commercially-minded in its strategic oil investments.
Mazrouei’s comments came during a session on the region’s oil policy moderated by Global Commodities Editor at Reuters News Richard Mably and organized by global information provider Thomson Reuters during the 150th anniversary of its presence in the Middle East and North Africa (MENA) region.
He said the UAE was satisfied by the high level of compliance with the current agreement by OPEC and non-OPEC countries to cut back oil production, and that this compliance would have a direct bearing on the general positive movement of non-OPEC partners in the agreement.
In light of the current agreement to reduce oil production, Mazrouei noted that the market is now correcting itself, and that a combination of healthy demand for oil with an expectation of crude stocks declining over a period of time would help maintain the market’s balance.
The minister highlighted the high level of compliance of oil producers with the production cuts that were set by the agreement, including the UAE’s full compliance, and he pointed out that a number of producers have cut production by allowing natural decline rates of oil wells to take their course.
He said the UAE had reduced its oil production by over 200,000 barrels per day in March compared with October 2016, expecting that the six-month production cut there would be averaging at least 140,000 barrels per day in line with the UAE’s compliance with the agreement.
“The world has changed, and now we are in an environment where we need to work together to achieve a single opinion that will benefit global markets,” he said during the panel.
“We see an evolved relationship with oil consumer nations, many of whom have become investors and partners in upstream oil production.”
In response to a question on whether consumers can tolerate higher oil prices, he explained that the priority was for a stable oil market at the right price that serves market demand and incentivizes the continuity of production while balancing the depletion of oil reservoirs and the need to sustain investment in the upstream sector.
The minister added that planned investments in the oil sector were relatively low, noting that the lag time needed for such substantial projects to come online means that there need to be incentives to attract future investments.