Abu Dhabi’s New Das Crude to Replace Two Grades From July

Abu Dhabi, holding about 6 percent of the world’s proven oil reserves, introduced a new crude blend, Das, to improve shipping flexibility as the United Arab Emirates sheikhdom seeks to boost production.

Das crude will go on sale in July and replace Abu Dhabi’s Umm Shaif and Lower Zakum grades, two of the emirate’s four crudes, state-owned Abu Dhabi Marine Operating Co. said today in a statement. The new blend will consist 55 percent of Lower Zakum crude, Ali R. Al-Jarwan, chief executive officer of the offshore oil and natural gas producer known as ADMA-OPCO, said at a news briefing in Abu Dhabi.

Das will sell at about the same price as Lower Zakum and at a level set retroactively by a month, said Sultan Al Mehairi, marketing and refining director at Abu Dhabi National Oil Co., or Adnoc, which owns 60 percent of ADMA-OPCO. Lower Zakum crude is priced retroactively for October sales at $112.20 a barrel.

“We are targeting, of course, the Asian market,” Al Mehairi told reporters. The new blend’s quality is similar to that of Saudi Arabia’s Extra Light grade, which has a density of 37.8 degrees on the American Petroleum Institute scale and a sulfur content of 1.1 percent, according to a January survey of crude specifications published by the U.S. Energy Administration. Das will have an API density of 39.2 degrees and sulfur content of 1.3 percent, ADMA-OPCO’s Al-Jarwan said.

Minority Stakes

ADMA-OPCO is introducing Das as part of a plan to increase output from the Das Island industrial complex, where Abu Dhabi processes, stores and exports crude pumped at offshore fields. The Das blend will later include oil from the Nasr field, according to a video shown at the briefing. BP Plc, Total SA (FP), and Japan Oil Development Co. Ltd. have respective stakes in ADMA-OPCO of 14.7 percent, 13.3 percent and 12 percent, the Abu Dhabi-based company said on its website.

Abu Dhabi controls most of the oil in the U.A.E., which produced 2.8 million barrels a day of crude in October, according to data compiled by Bloomberg. The U.A.E. ranked fourth in production last month among the 12 members of the Organization of Petroleum Exporting Countries, the data show.

Abu Dhabi plans to raise output capacity for crude to 3.5 million barrels a day in 2017 from about 3 million barrels a day, to meet export demand and supply refineries including Ruwais, its largest plant, which Adnoc is doubling in size.

Refinery Expansions

Das crude will “help keep supplies and exports up despite the big refinery expansions going on in Abu Dhabi, which will start taking more crude oil from August and September next year,” said Tom James, managing director of consultant Navitas Resources, speaking by phone from Singapore.

The new blend will be produced at “specifications matching international standards with the objective of increasing flexibility and profitability,” ADMA-OPCO said in the statement, citing Al-Jarwan.

“Loading one blend instead of two crudes will ensure more time enhancement and flexibility to avoid keeping the oil tankers beyond the time frame allowed for loading,” it said.

Das Island’s output of 600,000 barrels a day will reach 765,000 barrels in the “coming few years,” ADMA-OPCO said. The company expects its total production to rise to 970,000 barrels a day by 2020, supported by expansions at the Lower Zakum, Nasr and Umm Shaif fields, it said.

Crude from two additional offshore fields, Umm al Lulu and Zirku, may be combined to form a separate blend at an unspecified future date, Al-Jarwan said, without giving details.

To contact the reporters on this story: Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net; Nayla Razzouk in Dubai at nrazzouk2@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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