The UAE is working to increase its crude oil production capacity to 3.5 million barrels per day in next few years, Oil Minister Mohammed Al Hamli said.

Speaking at an energy event in Abu Dhabi, Hamli said his country's current production is at 2.5 million barrels per day (bpd), while an additional capacity of 200,000 bpd is expected to come onstream by early next year.
Hamli said the UAE has the fourth world largest oil reserves estimated at 98 billion barrels and the fifth natural gas reserves of 6.1 trillion cubic metres.
"Continuing investments in production projects should increase the country's output capability to more than 3.5 million bpd in the next few years", he said without giving a specific timeframe.
Hamli said huge investments are being undertaken in the Gulf region - Saudi Arabia and Kuwait - to increase production and refining capacities to meet future world demand.
Referring to the global oil market, Hamli said current high oil prices aren't propped up by shortage of supply but due to refinery bottlenecks, speculation, fears of shrinking producing capacity and political instability in some producing regions.
He said the global oil market is currently well supplied, while commercial oil inventories in consuming countries are at higher levels than previous years.
"Solving the refining constraints requires urgent effort from both producers and consuming countries, because building new refineries takes several years," Hamli said.
Meanwhile, Opec producers should boost supply next year to keep up with rising global demand for crude oil, the UAE Oil Minister said.
"Forecasts for 2006 show that global demand for oil will rise by 1.5 million barrels per day and that growth in non-Opec production will retreat, which necessitates that Opec increase supplies to balance supply with demand," Hamli told the Kuwaiti daily Al-Qabas.
But Hamli said the oil market was glutted and there was no need for Opec to increase production now.
"The oil market is satiated with crude oil currently and there is no shortage of supplies and prices have fallen recently compared with the past few months," Hamli was quoted saying.
"It is not reasonable to hike production during this period and besides Opec has put two million barrels (per day) at the market's disposal," he added.
Earlier, Hamli said Opec may consider rolling over the two million barrels per day (bpd) offer of spare capacity if there is a need for it. But Opec President Sheikh Ahmad Al Fahd Al Sabah said at the time it was too early to decide the issue.
Hamli said that a reasonable price for oil is between $40 and $50 per barrel in the near term, adding that he was not worried about an oil price decline next year.
"It is difficult to place a specific number for the future but in the near term a reasonable price is $40 to $50," he said, responding to a question that on some forecasts that prices may fall sharply next year to between $20 and $35 per barrel.
"Frankly, these expectations are too pessimistic," he said.