Expect more oil from United Arab Emirates

OPEC member utilizing enhanced methods to pull more oil out of the ground.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Oct. 23, 2015 at 9:31 AM
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WASHINGTON, Oct. 23 (UPI) -- OPEC-member United Arab Emirates could expand oil production by 30 percent by 2020 using a costly recovery technique, a U.S. federal review finds.

The United Arab Emirates was the third-largest contributor to oil production from the Organization of Petroleum Exporting Countries last month. September oil production of 2.9 million barrels per day represented a 0.8 percent increase from the previous month.

A brief report from the U.S. Energy Information Administration said Emirati production could increase by 30 percent by 2020 using a process called enhanced oil recovery.

Primary recovery from oil deposits relates to natural pressure in the reservoir. Secondary recovery involves water or gas injection into the well to increase production. Enhanced oil recovery techniques include further stimulation from steam, gas or chemical injections into the well.

"EOR is an expensive process, and at current prices, these projects may not be economic," EIA stated. "However, despite today's low oil prices, the UAE continues to invest in future production."

Crude oil prices have faced downward pressure because of increased crude oil stored in the United States and because of the eventual return of Iranian oil to the international market.

EIA's report said the Upper Zakum oil field in the United Arab Emirates, the second largest offshore oil field in the world, received development support to the tune of $800 million in 2012. By next year, the field should produce about 750,000 barrels per day, a 27 percent increase from current levels.

OPEC members have adhered to a policy to keep production levels steady. Weak global economic growth has in part led to an oversupplied market, pushing crude oil prices to historic lows. Brent crude oil traded Friday at $48.10, more than 40 percent below the price for this date in 2014.

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