US embassy cable - 03ABUDHABI1086

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(C) ABU DHABI OVERPRODUCING QUOTA BY 200,000 B/PD, BUT STILL HAS EXCESS CAPACITY OF 400-450K B/PD

Identifier: 03ABUDHABI1086
Wikileaks: View 03ABUDHABI1086 at Wikileaks.org
Origin: Embassy Abu Dhabi
Created: 2003-03-05 13:06:00
Classification: CONFIDENTIAL
Tags: EPET PGOV BEXP ENRG ECON TC
Redacted: This cable was not redacted by Wikileaks.
null
Diana T Fritz  05/24/2007 04:56:31 PM  From  DB/Inbox:  Search Results

Cable 
Text:                                                                      
                                                                           
      
CONFIDENTIAL

SIPDIS
TELEGRAM                                           March 05, 2003


To:       No Action Addressee                                    

Action:   Unknown                                                

From:     AMEMBASSY ABU DHABI (ABU DHABI 1086 - UNKNOWN)         

TAGS:     EPET, PGOV, BEXP, ENRG, ECON                           

Captions: None                                                   

Subject:  (C) ABU DHABI OVERPRODUCING QUOTA BY 200,000 B/PD, BUT 
          STILL HAS EXCESS CAPACITY OF 400-450K B/PD             

Ref:      None                                                   
_________________________________________________________________
C O N F I D E N T I A L        ABU DHABI 01086

SIPDIS
CXABU:
    ACTION: ECON 
    INFO:   P/M AMB DCM POL 
Laser1:
    INFO:   FCS 

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: DCM:RAALBRIGHT
DRAFTED: ECON:TEWILLIAMS
CLEARED: NONE

VZCZCADI677
OO RUEHC RUEHHH RUEHDE RUCPDOC RHEBAAA
DE RUEHAD #1086 0641306
ZNY CCCCC ZZH
O 051306Z MAR 03
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8702
INFO RUEHHH/OPEC COLLECTIVE PRIORITY
RUEHDE/AMCONSUL DUBAI PRIORITY 2842
RUCPDOC/USDOC WASHDC
RHEBAAA/USDOE WASHDC
C O N F I D E N T I A L ABU DHABI 001086 
 
SIPDIS 
 
DEPT FOR NEA/RA, NEA/ARP, INR/EC, EB/IEP, EB/CBA 
USDOE FOR INT'L AFFAIRS -- COBURN, ALSO CALIENDO 
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 03/05/13 
TAGS: EPET, PGOV, BEXP, ENRG, ECON, TC 
SUBJECT:  (C) ABU DHABI OVERPRODUCING QUOTA BY 200,000 B/PD, 
BUT STILL HAS EXCESS CAPACITY OF 400-450K B/PD 
 
1.  (U) Classified by DCM Richard A. Albright for reasons 
1.5 (B) and (D). 
 
2.  (C)  A western oil executive in an excellent 
position to know told Econchief March 5 that he 
believes that the Abu Dhabi National Oil Company 
(ADNOC) is overproducing the UAE's 2.14 million 
barrel per day (bpd) OPEC quota by as much as ten 
percent, i.e., around 200,000 bpd.  This 
statement tracks with an earlier private 
admission to Econchief by the number two official 
at ADNOC that Abu Dhabi's senior oil policy 
organization, the Supreme Petroleum Council 
(SPC), had issued instructions at the turn of the 
year for ADNOC to ramp up output to take 
advantage of high prices -- a move driven both by 
an ongoing budget crunch resulting from low 
returns on the government's portfolio 
investments, as well as concern that oil prices 
might drop considerably in a post-Iraq 
contingency environment. 
 
3.  (C)  Our western oil source said that at 
current rates of production (i.e., ten percent 
over quota or around 2.3 million bpd) Abu Dhabi 
could probably increase sustainable output by as 
much as 450,000 bpd.  It would not take much time 
to reach that level of output, but it would 
require direction from the senior-most leadership 
-- the SPC, or better yet, President Zayid 
himself -- because to reach such a level ADNOC 
would need to relax environmental guidelines and 
a number of other internal rules limiting output 
per field and per well, scheduling of 
maintenance, etc.  The most significant hurdle to 
be overcome would be to temporarily lift the ban 
on flaring of gas because while ADNOC can produce 
the oil without difficulty, the local gas 
processing company, GASCO, will not have the 
capacity to absorb the additional associated gas 
that would result from a ramp up in crude 
production. 
 
4.  (C)  COMMENT:  We believe our source is in a 
position to know Abu Dhabi's current spare 
capacity and would find his number of 450k 
barrels per day generally credible, if a bit on 
the conservative side. 
 
WAHBA 

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