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Oil in Global Economy Series: UAE to expand production capacity to 3.5 million barrels by end 2018

United Arab Emirates’ (UAE) state owned oil company, Abu Dhabi National Oil Company (ADNOC) is looking to expand its production capacity by the end of next year from 3 million barrels per day to 3.5 million barrels per day. ADNOC said earlier this week that an offshore concession, which operates as Abu Dhabi Marine Operating Company will be split in order to unlock greater opportunities and increase partnerships. The move is expected to increase production capacity by half a million barrels per day.

The move comes amid an OPEC deal that requires OPEC countries to participate in a production cut agreement that is aimed to reduce supplies from OPEC by 1.2 million barrels per day. As part of the deal, the UAE has pledged to cut 139,000 barrels per day from its October 2016 and bring production below 2.874 million barrels per day. However, the UAE has not strictly complied with its share of the cuts in any of the months since the start of the deal in January.

UAE is now aiming to join the list of producers from OPEC which are looking to boost production. Previous reports suggest that Iran, which is barred under the deal to produce more than 3.79 million barrels per day is looking to boost production to 4.2 million barrels per day. Iraq also plans to increase production to 5 million barrels per day. Libya and Nigeria have similar plans of boosting production.

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