Abu Dhabi National Oil Company (Adnoc) is slashing payments owed to its suppliers by 20 per cent as it tries to save costs amid slumping oil and shrinking revenues.

The state-owned firm, which is responsible for extraction and sale of about 6 per cent of world’s proven oil reserves, has asked its suppliers to accept 80 per cent of the billed amount, according to three people familiar with the matter. The payments cuts were handed down across Adnoc businesses, including its upstream and downstream assets, according to an Abu Dhabi-based banking source.

Most suppliers have accepted reduced payments to maintain future business with Adnoc, said the banker, who asked not to be identified as the information has not been made public. “When Adnoc tells you to take a discount on payment, you just take it,’’ he said.

An Adnoc spokesman did not respond to several email requests and phone calls for a comment. 

Abu Dhabi is the largest emirate in the UAE and holds the bulk of the country’s hydrocarbons wealth. It is a staunch backer of the Saudi-led price war against US shale producers as oil producers’ group Opec tries to protect its share of global energy trade.

The price of Brent crude, the benchmark for more than half of the world’s oil, has lost about two-thirds of its value since a mid-2014 peak, slumping to near 12-year lows of less than $30 a barrel in January this year.

The six-member GCC bloc accounts for about a third of the world’s oil reserves and relies heavily on the sale of hydrocarbons for revenues. With the slump in oil prices, their economies are facing a slowdown and their governments are running austerity campaigns.

The near $100-a-barrel oil prices the past few years have fuelled economic growth and spurred investments into oil and gas sector expansion. However, the current supply glut in the oil market and depressed demand in emerging markets mean oil producers and refiners have to cut costs while they await a price reversal and a change in the global economic scenario.

Adnoc is aiming to increase crude production to 3.5 million barrels a day (b/d) by 2018, up from a current reported level of about 3 million b/d. It is responsible for the vast majority of oil exploration, production, refining and gas processing in the UAE. It also undertakes the marketing, supply, transportation and manufacturing of petrochemicals in the country.

The firm carries out its upstream and downstream activities through 16 specialist subsidiaries, some of them joint ventures with international companies including France’s Total, Austria-based Borealis, the UK’s BP, US-based ExxonMobil and Japan Oil Development Company, according to its website.