Analysts cynical of new discovery’s potential
Dubai has discovered a new offshore oilfield, the emirate’s ruler said on 4 February.
The discovery was made to the east of the existing Rashid field, Sheikh Mohamed bin Rasihd al-Maktoum said in a statement. The ruler’s office declined to comment on the size of the new field, potential output or a timeline for its development.
State oil and gas production firm Dubai Petroleum Enterprise (DPE) confirms to MEED that it is involved in the development of the field. The company declined to comment on the involvement of an international partner during the exploration process.
Oil accounted for 2.1 per cent of Dubai’s gross domestic product in 2008, with the sector accounting for AED6.6bn ($1.7bn) of economic output during a year when oil prices hit record highs, according to official figures. The emirate’s oil production is no more than 50,000 barrels a day (b/d), senior industry sources tell MEED.
Analysts remain cynical over the potential of a new discovery in Dubai, given that existing oilfields have already peaked. Production at the Fateh, South Fateh, Falah and Rashid fields started in the 1970s and 1980s but overall output peaked at around 400,000 b/d in the early 1990s.
Until 2007, when DPE took over the emirate’s oil production, the industry was overseen by a consortium led by the US’ ConocoPhillips. Figures released by the consortium after it was disbanded suggested that overall output was around 65,000-80,000 barrels a day (b/d), although production was in rapid decline.
“For a long time, [Dubai was] producing a significant amount of oil from a relatively small offshore area,” says Samuel Ciszuk, Middle East analyst at US-based IHS Global Insight. “You would have expected the guys led by Conoco to have explored extensively. If nothing was found then, I wouldn’t think it was a very big find. If production now is 50,000 b/d and they find something that can produce initially 5,000 b/d it is a 10 per cent increase but in real terms it is not a big find.”
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