Dubai — Abu Dhabi, the oil-rich emirate in the seven-member UAE federation, has merged the Supreme Petroleum Council, its highest energy decision-making body, with a newly-formed council as it seeks to fold energy and economic affairs into one entity.
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UAE President and Abu Dhabi ruler Sheikh Khalifa bin Zayed Al Nahyan issued a decree on Dec. 27 to create the Supreme Council for Financial and Economic Affairs, which will be chaired by Abu Dhabi Crown Prince Mohamed bin Zayed, the Abu Dhabi media office said in a tweet.
Abu Dhabi Crown Prince Mohamed bin Zayed, who used to be vice-chairman of the SPC, will hold the same title in the new council, which will oversee Abu Dhabi's financial, investment, economic, petroleum and natural resources affairs. The SPC, set up in 1988, had 16 members, including energy minister Suhail al-Mazrouei, according to the website of Abu Dhabi National Oil Co.
The new council's board members, who will have a three-year term, include Minister of Industry and Advanced Technology Sultan al-Jaber, who is also CEO of ADNOC, the UAE's biggest energy producer. Other board members include Khaldoun al-Mubarak, CEO of sovereign wealth fund Mubadala Investment Co. Both are members of the SPC, according to ADNOC's website.
"The law also stipulates that the Supreme Petroleum Council's regulatory powers will be merged with those of the new council and its members will continue to exercise their role as ADNOC's board members until a new board of directors is appointed," the media office said on twitter.
"The council's methodology allows the boards of concerned authorities the corporate autonomy to develop their strategies to be approved by the council, and the independence to develop, approve and implement their annual plans."
ADNOC pumps most of the oil produced in the UAE, OPEC's third largest member. The UAE produced 2.51 million b/d in November, according to the latest S&P Global Platts OPEC+ survey, below its 2.59 million b/d quota.
The OPEC+ alliance, which was supposed to ease its production cuts in January by increasing collective output by 1.9 million b/d, decided in a December meeting to raise production by only 500,000 b/d to temper weak global oil demand.
The UAE's January quota will be 2.626 million b/d in January, instead of the 2.735 million b/d that was originally slated for next month under the old OPEC+ agreement.
Such changes to OPEC+ agreements and the anemic oil demand outlook may frustrate the UAE's ambitious oil growth plans, which were hammered prior to this year's historic 9.7 million b/d collective cut implemented in May.
$122 BILLION CAPEX
The formation of the new council comes a month after the Supreme Petroleum Council approved ADNOC's $122 billion spending plan over the next five years as the national oil producer seeks to boost its oil output capacity to 5 million b/d by 2030 from 4 million b/d currently.
Although the new capex is 10% lower than the $132 billion that was supposed to be spent between 2019 and 2023, it is still higher than that of several international oil companies, which are slashing their spending plans amid the low oil prices and energy transition goals.
SPC also announced in November the discovery of 22 billion stock tank barrels or STB of recoverable unconventional onshore oil resources that ADNOC said had production potential on par with the most prolific North American shale plays.
Additionally, 2 billion STB in recoverable conventional oil reserves was announced, boosting the UAE's recoverable conventional oil reserves to 107 billion STB, ADNOC said.