US embassy cable - 04ABUDHABI1942

C O N F I D E N T I A L ABU DHABI 001942 
 
SIPDIS 
 
DEPT FOR NEA/RA, NEA/ARP, INR/EC, EB/IEP, EB/CBA 
USDOE FOR INT'L AFFAIRS - COBURN, ALSO CALIENDO 
USDOE FOR OFFICE OF THE SECRETARY - RHONDA HUDOME 
USDOC FOR 1000/OC/ 
USDOC FOR 4520/ITA/IEP/ONE 
USDOC FOR 4530/ITA/MAC/ONE/DGUGLIELMI 
4500/ITA/MAC/DAS/WILLIAMSON 
3131/CS/OIO/ANESA 
 
E.O. 12958: DECL 06/06/2009 
TAGS: EPET, ENRG, ECON, TC 
SUBJECT:  UAE PRODUCTION IN THE WAKE OF THE JUNE OPEC QUOTA 
INCREASE 
 
(U) Classified by Ambassador Marcelle M. Wahba, for reasons 
1.5 (B) and (D). 
 
1. (C) Ambassador, accompanied by EconChief paid her 
farewell call to ADNOC CEO Yousef Omair bin Yousef and 
Deputy CEO Abdullah Nasser Al-Suwaidi on June 6, 2004.  The 
Ambassador thanked Yousef for the UAE and OPEC's welcome 
action and asked about the UAE's announcement that it would 
produce an extra 400,000 barrels per day.  Yousef 
acknowledged that some of the announcement reflected extra 
oil that the UAE had already been producing.  He said that 
the UAE's new production would be about 2.5 million barrels 
per day. (note: The UAE's quota before the increase was 
2.05 mbd.  After the Beirut meeting, its quota increased to 
2.22 mbd.  Dubai production does not/not count as part of 
the UAE's OPEC quota.)  He added that the UAE's normal 
production, counting Dubai, was about 2.2 million barrels 
per day.  Yousef further said that the UAE produced about 
250,000 barrels per day of condensate, which were not 
covered by the OPEC quota. 
 
2. (C) The Ambassador asked for Yousef's opinion about the 
impact of OPEC's decision on oil prices.  Yousef stated 
that he thought speculation and political concerns were 
playing a role in the current high oil prices.  He noted 
that total world consumption of oil was about 80 million 
barrels per day, but that the volume of traded oil was 180 
million barrels per day.  He also explained that oil demand 
was indeed increasing, and cited China as an example of a 
country that was increasing its energy use at a tremendous 
rate. 
 
3. (C) For its part, ADNOC was looking at expanding its 
production capacity, increasing its oil production capacity 
by 20 to 30 percent over the next three to seven years and 
doubling onshore LPG output.  Yousef also said that ADNOC 
would be looking to expand dramatically its petrochemical 
production over the next few years.  In response to the 
Ambassador's question about reports that the northern 
emirates were interested in gas deals with Iran and whether 
that would affect ADNOC, Yousef stated that it would not. 
ADNOC did not have a gas contract with Sharja.  It was 
supplying gas to Dubai and was increasing its deliveries to 
meet demand. 
 
Wahba