Kippreport investigates if oil prices aren’t the only cause for the market slumpAugust 27, 2015 12:00
UAE Upper Zakum oil output may drop 40 pct on outage
Output of Upper Zakum crude from the Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates will fall in late April and May by as much as 40 percent because of a partial field outage, traders said on Thursday.
April 28, 2011 3:49 by p.deleon
Abu Dhabi’s Zakum Development Company (ZADCO), operator of the field on behalf of ADNOC, confirmed the outage, but said it was for normal maintenance and would not affect monthly average production.
Two traders said production during the outage would fall to between 300,000 and 320,0000 bpd, while three other traders said state-owned ADNOC planned to resume full production of about 500,000 barrels per day (bpd) by June.
“I don’t know if it was planned or not, but it surprised people,” a trader said, adding that was reflected by Dubai spreads, or the premium of prompt supplies over later-dated cargoes.
The premium of May Dubai crude swaps over June increased by 4 cents over the past two days to 47 cents a barrel, Reuters data shows. Upper Zakum crude can be delivered instead of Dubai for pricing purposes according to the methodology of pricing agency Platts.
Some traders said the outage could raise demand for spot Middle East crude loading in May.
ADNOC holds a 60 percent stake in Upper Zakum. Other shareholders include ExxonMobil and Japan Oil Development Company Limited, according to Exxon’s website.
ExxonMobil declined to comment.
Crude oil from the Upper Zakum, Umm Al Dalkh and Satah fields is pumped via main oil lines to Zirku Island for further processing, storage and export. (Reporting by Florence Tan, Alejandro Barbajosa and Humeyra Pamuk; Editing by Himani Sarkar)