Although the North American shale revolution is touted to dramatically shift the the dynamics of the global oil industry, the UAE and other OPEC nations remain confident of their future in the global petroleum market.
On eve of an OPEC conference, Suhail Al Mazrouei, the UAE Minister of Energy, told The National; “Of course we can’t ignore it, but I doubt it will be a huge impact if there is a demand on the OPEC. And as the UAE, our target is the East, and I don’t think this will hugely impact that. We can take a longer time to debate what is the impact and what is the production, but I don’t see any immediate impact.”
The group’s bi-annual meeting in Vienna is viewed as key to determine OPEC’s response to the shale revolution. The outcome will decide the oil supply required to keep the market in balance and what direction would oil prices take in the future. Even though the members are adding pumping capacity, the demand for OPEC supplies is likely to draw down over the next two years.
Estimates from the International Energy Agency suggest that the demand for OPEC crude will fall from 30 million bpd last year to 29.2 million bpd in 2015. During this period, OPEC member producers will increase their capacity from 35 to 36.4 million bpd. Besides Iraq and Libya, the UAE is also working on a long term plan to expand production by 2.8 to 3.5 million bpd by 2017. No decision has been taken on how much spare capacity will be retained by the UAE.
The fall in demand is being attributed to a surge in the North American production — said to be the biggest increase since the dawn of oil exploration in the 1860s. The OPEC countries are expected to search Asian markets for new customers.
World Shale Gas Resources Infographic- An Assessment of unconventional gas potential by country