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Abu Dhabi’s growth to be largely flat in 2023 due to oil output constraints: S&P

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Abu Dhabi’s real GDP growth accelerates to 9.3% in 2022, but is expected to remain roughly flat in 2023 as OPEC+ agrees to cut oil production, S&P Global Ratings said in a new report.

“We estimate economic growth to be broadly flat in 2023, with non-hydrocarbon growth of around 4%, partly due to tighter monetary policy conditions,” Trevor Cullinan and other analysts said in a note.

The industry will expand at a rate similar to 2026. Activity in the hydrocarbons sector will fall by about 5% in 2023 due to OPEC+ production cuts, but grow by an average of about 3.5%

Beyond 2024-2026. “Taking these two sectors into account, we expect GDP growth of around 4% over the same period.”

The agency expects Abu Dhabi’s oil production to increase in the medium term as OPEC+ quotas are lifted and production capacity increases from about 4 million barrels per day to 5 million barrels per day by 2027, in line with state oil producers, refiners and distributors. strategy of the Abu Dhabi National Oil Company (ADNOC).

“Despite this assumption, based on the OPEC+ announcement in October 2022, we expect oil production to decline to an average of around 2.9 mb/d in 2023, compared to an average of 3.07 mb/d in 2022. We expect Oil production will rise again in 2024 (3.05 million bpd. bpd) and 2025 (3.15 million bpd), although there is still room to rise at these production levels given capacity expansion plans,” S&P said.

(Writing by Brinda Darasha; Editing by Seban Scaria)

brinda.darasha@lseg.com

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