Opinion and Editorial

KT Edit: Abu Dhabi cements its position as a global oil major

Filed on November 11, 2019 | Last updated on November 11, 2019 at 10.08 pm

Last week Abu Dhabi revealed reserves of seven billion barrels of crude oil and 58 trillion standard cubic feet of conventional gas.

Buyers will be protected from swings in the market and get more value from the Abu Dhabi Oil Company with the launch of a new exchange to list the Emirate's signature Murban crude. Abu Dhabi is expanding its horizons with this exchange; it is going global aggressively while sewing together new partnerships to make it worth exploring (and exporting) its core resource. In a sense the emirate is playing to its strengths as it makes the oil trade more transparent, inclusive and worth the money for both buyers and sellers. It was announced on Monday that BP, Total, Inpex, Vitol, Shell, Petrochina, Korea's GS Caltex, Japan's JXTG, and Thailand's PTT had agreed to become partners in this venture. This development reflects the confidence the oil industry has in the ability of Adnoc to deliver consistently for its customers. The oil exchange spells out Adnoc's ambitions and shows the company is nimble and is moving based on the needs of the market. This is a less conservative approach that could transform the industry.

More players will trade and hedge in Murban futures that will share space with other global oil benchmarks. Customers will "know what they are paying in advance and will not have to wait for two months to know price of oil they have already received under the current retroactive pricing system," reports said. The decision is 'historic and strategic' in nature. Abu Dhabi is keen to cement its standing in the global energy market while making a mark in Asia which is a fast growing market. The UAE's look-East policy is paying dividends and driving this shift in strategy. Last week Abu Dhabi revealed reserves of 7 billion barrels of crude oil and 58 trillion standard cubic feet of conventional gas. The country is now sixth in terms of global oil and gas reserves. With the new exchange and Murban's listing, Adnoc is ensuring that its oil business remains secure from the moods of the market and its potential is enhanced in the long term.

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