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“ADNOC” Abu Dhabi notifies suppliers of its intention to reduce costs after the collapse of oil prices, today, Tuesday, March 24, 2020 05:02 pm
According to Reuters, the ADNOC message said, “While our business strategy remains unchanged, we continue to focus on completing our important growth projects and anticipate exploring opportunities to control costs across the ADNOC Group.”
The letter issued on March 17 added: “Our supply department, in the coming days, will contact you to initiate a comprehensive review of your existing engagement with ADNOC with a view to identifying cost savings.”
The sources indicated that the letter was sent to several companies dealing with ADNOC, including companies in oil services, technical and engineering services, project services and drilling.
ADNOC is the oil company run by the government of Abu Dhabi, the richest emirate in the United Arab Emirates.
A spokesman for ADNOC said the company “is involved with our partners and suppliers while we move forward with our projects responsibly. We focus on raising performance, effectiveness and value across our portfolio in response to market conditions.”
ADNOC said on March 11 that it would increase its oil supply to a record level of four million barrels per day in April, an increase of about one million barrels per day above current production. Noting that it will accelerate its plans to increase production capacity.
A global agreement to cut supplies between the Organization of the Petroleum Exporting Countries and Russia and other producers, in the context of what is known as the OPEC + alliance, collapsed this month.
In the past three months, ADNOC pumped 3 million barrels per day. The refining capacity of the company is 922 thousand barrels per day and intends to increase the production of petrochemicals three times to 14.4 million tons annually.
In 2017, ADNOC said it plans to spend more than 400 billion dirhams ($ 109 billion) over five years, to boost oil and gas production and expand downstream activities.
The Saudi National Oil Company, Saudi Aramco, the largest oil producer in the world, said this month that it plans to reduce capital spending for the year 2020 to between 25 and 30 billion dollars, compared to 32.8 billion in 2019.