UAE oil income to decline 43% in 2009

A sharp decline in crude prices will ally with lower production to cut UAE's oil export earnings by about 43 per cent in 2009, while Opec's revenues could suffer more, said an international energy centre yesterday. From a record US$81 billion (Dh297bn) in 2008, the UAE's crude export revenues are projected to plunge to about US$46bn in 2009, said the Centre for Global Energy Studies (CGES), which is run by former Saudi Arabia's oil minister Sheikh Ahmed Zaki Al Yamani.

The figures, sent to Emirates Business, showed UAE's revenues will also be lower than in 2007 when they stood at US$58bn the 2006 earnings of US$53bn. But they are forecast higher than the 2005 income of US$42bn and more than double the 2003 revenues of US$21bn. The report showed the combined income of the? 12-nation Organisation of Petroleum Exporting Countries (OPEC) would tumble by 53 per cent from US$854bn in 2008 to US$501bn in 2009.

"The forecast for 2009 are based on an average price of Opec's basket of US$60.6 compared with a record US$94.2 in 2008... the group's production is also projected to average 28.6 million bpd this year compared with 32.1 million bpd in 2008," said CGES's Deputy Director Leo Drollas.

Oil prices exceeded US$70 a barrel last month but they have averaged below US$50 so far this year as they were as low as US$40 in the first two months. Prices dipped by more than US$100 in late 2008 from their record high level of US$147 in July because of weakening demand due to the global downturn.

The fall prompted OPEC to agree on cumulative combined output cuts of about 4.2 million bpd, most of which were shouldered by Gulf oil majors, which are believed to have trimmed supplies by more than two million bpd. As a result, Saudi Arabia is expected to suffer most as it is the world's largest crude exporter. – Emirates Business 24|7