UAE Energy Minister Mohammed bin Dhaen Al Hamili, today attended the opening session of the 4th Gulf Intelligence UAE Energy Forum in Abu Dhabi.

Focused on the oil industry in East Africa, the event drew Ministers of Energy from Mozambique and other African countries, as well as world major oil and gas companies.

Dr Ali Obaid Al-Yabhouni, Chief Executive Officer of National Gas Shipping Company Ltd (NGSCO) and Abu Dhabi National Tanker Company (ADNATCO) said in his closing remarks that "We have been given important insights into some of the challenges facing the oil and gas industry over the coming years. It has been particularly interesting to hear the vision of some of the new players on the block, namely those in the African continent." He added the industry is in a constant state of flux, with unexpected game-changing trends constantly making an appearance. "We all need to respond and adapt, and meetings such as this help us to remain well-informed of emerging situations." Al Yabhouni noted that there is always uncertainty and geo-political turmoil. "The recent fiscal cliff issue in the United States shows just how closely politics impacts on the economy, and we are all relieved that the issue has been averted. However, allow me to give you some indications of what we should expect in the coming months," he added.

He added that the impact of global economic growth on energy demand makes this the single most important indicator impacting the oil market, indicating that on this issue, the outlook is moderately optimistic. The world economy is expected to grow by 3.2 per cent in 2013.


"That is just a little bit better than last year's level of 3 per cent. But one should note that this year's global economic performance is subject to continued uncertainties. OECD growth is likely to remain static at 1.4 per cent and, as in previous years, the major growth contribution is seen coming from the emerging economies. In 2013, China is expected to expand by 8.0 per cent after growth of 7.6 per cent last year, and India by 6.6 per cent, up from 5.5 per cent growth," Al Yabhouni said.


He added this modest economic growth will provide little room for a large increase in demand for energy. This year, the global oil market is expected to grow by just 800,000 barrels per day. Once again, the growth in oil demand is expected to come from the non-OECD, mainly China, India, the Middle East and Latin America, driven by demand from industrial users and the transport sector.

Al Yabhouni said this will provide little room for OPEC countries to increase production, as non-OPEC supply in 2013 is likely to rise by 900,000 barrels per day. Increased production from the US, Canada, North and South Sudan, Brazil, Australia, Russia, and Kazakhstan, will more than offset expected declines in Norway, Syria, Mexico, and the UK.

"Another important indicator that can provide clues to the future of the oil market is oil stock movements. Since the start of last year, OECD commercial oil stocks have risen significantly. This is due to an increase in the strong performance of OPEC and non-OPEC supply, amid weak OECD demand. The latest information for October showed that total OECD commercial oil stocks stood at a comfortable level, representing a surplus of 38 million barrels above the five-year average," he added.

Al Yabhouni said a period of slow, but steady, demand growth will give producers the opportunity to optimise investments, as well as to rationalise costs. Indeed, the last few years have witnessed excessive cost inflation, and we look forward to a period of lower costs that will allow us to obtain better value for money from our ongoing investments.

"As part of a policy to create a more balanced economy, in which the UAE reduces its dependency on oil exports, you can expect to see a continued programme of investments along the hydrocarbon value chain, notably in added value industries such as refining, petrochemicals, fertilisers and shipping", he said

Al Yabhouni noted all this points to a promising future for the UAE, in which "we are not immune to external events, but have increased control of our own economic destiny.

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