Adnoc notifies on supply cut

Adnoc notifies on supply cut
(Reuters) 27 September 2007
TOKYO/SINGAPORE — Abu Dhabi National Oil Co (Adnoc) told at least one customer yesterday it would halve term November exports of its three offshore crudes due to field work, blunting the impact of Opec's planned output rise.

Adnoc, the main oil producer in Opec-member the United Arab Emirates (UAE), notified at least one refiner in Japan that it was reducing supplies of its Umm Shaif, Lower Zakum and Upper Zakum crudes by about half, a trading source said.

The notice was the first to confirm the extent to which planned maintenance would affect exports from the emirate, which pumped about 2.6 million barrels per day (bpd) last month. Two other Japanese refiners and one in Southeast Asia had yet to receive the note.

Adnoc had said on Sunday that oilfield maintenance would reduce oil production by 600,000 bpd in November.

Oil traders had earlier said as much as 810,000 bpd of output could be shut in for two to three weeks during the peak of the maintenance.

The three fields, in which Exxon Mobil Corp, Total and BP hold equity stakes, produce a total of just over 1 million bpd, according to recent estimates.

Production at the UAE's biggest field, onshore Murban, will not be affected, the oil trader said. BP, Royal Dutch Shell, Total and Exxon Mobil are partners there.

The trader added that Adnoc had been selling extra supplies to help its customers build up stocks ahead of the maintenance, which comes just as refiners are bracing for peak winter demand, particularly in Japan, the world's second-biggest importer, which relies on UAE crude for nearly a quarter of its supplies.

"Adnoc's commitments to its term clients are all met by advancing the majority of liftings, and some deferments that have been re-scheduled by mutual agreement," the state oil company said on Sunday in a statement.

Maintenance at the country's Ruwais refinery from late December through February may also allow the UAE to free up more supplies for export following the November work.

The supply reduction in the three grades had been expected for months and traders had earlier identified the three fields as the 530,000-bpd Upper Zakum, the 250,000-bpd Lower Zakum and the 280,000-bpd Umm Shaif.

Saudi Arabia persuaded the Organisation of the Petroleum Exporting Countries to raise output by 500,000 bpd at a meeting earlier this month in a gesture to consumer nations worried by the economic impact of record-high oil prices.

U.S. crude for November delivery was up 23 cents at $79.76 a barrel by 0723 GMT, off a record high of $83.90 hit last Thursday.