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Saudis warn of drop in oil exports; UAE firm reports large profit increase

ABU DHABI — Saudi Arabia is expected to decrease crude oil exports amid rising domestic demand.


The Jadwa Investment Research Department has asserted that the Saudi kingdom faced what the consultant termed a "difficult energy future." Jadwa cited a nearly 25 percent increase in domestic energy consumption combined with low prices offered in the kingdom, as little as three percent of the market rate.

"While we think prices will continue to rise, we do not think they will rise at the rate required to meet the break-even price for the budget," the report said. "Indeed, a decade-long plateau in oil prices, as the market has previously experienced, would likely lead to a rapid deterioration of the kingdom's future fiscal position."

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Jadwa stressed that Saudi oil production — now reported at nine million barrels per day — has not risen significantly since 1980. The report did not envision any sustained oil increase over the next decade, Middle East Newsline reported.

Meanwhile, a leading Gulf energy company has reported a sharp increase in profits in 2011.

Dana Gas, located in the United Arab Emirates, reported a net profit of 124 million dirham [$33.7 million] during the second quarter of 2011. The company, based in Dubai, said this marked a 276 percent increase over the same period in 2010.

"This excellent outcome is driven by the 20 percent increase in production from Egypt and the Kurdistan region of Iraq and consequent increase in revenues accompanied by our tight control of costs throughout the organization," Dana Gas chief executive officer Ahmed Al Arbeed said.

Hydrocarbon sales increased to 627 million dirham [$170.7 million] and gross profits reached 341 million dirham [$92.8 million], an increase of 46 and 90 percent, respectively.

The company also reported a 20 percent production rise in company operations in Egypt and northern Iraq.

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