ABU DHABI, Feb 26th, 2006 (WAM) - The UAE, Saudi Arabia and other key Arab oil producers will pump between $60-70 billion into projects in the next few years to add at least six million bpd to their crude output capacity to meet growing global demand, according to a top Arab oil official.

Dr. Abdul Aziz Al Turki, Secretary General of the 10-nation Organisation of Arab Petroleum Exporting Countries, said strong crude prices in 2005 supported such capacity expansion programmes and he expected prices to remain high despite a projected slackening in demand growth in China and India.

In an interview with the Pipeline oil magazine to be published next week about plans to reduce reliance on Middle East oil. "It defies conventional wisdom" he said of Bush's statement.

"Significant expansion plans to increase production capacity have been undertaken by OAPEC members, most notably in Saudi Arabia, Qatar, UAE and Kuwait and to a lesser extent in Libya and Algeria. Our readings reveal that in the medium term (2004-2010) more than 50 projects covering pipelines, export terminals and most recently downstream expansions at a cost of $60-70 billion i.e. $ 8.5 billion annually will be carried out.," he told the Dubai-based monthly magazine.

"Upon implementation those projects should yield a substantial rise in oil production capacity from its current level of 20.7 mb/d to 26.8 mb/d by the end of 2010." He said strong crude prices in 2005 boosted OAPEC's revenues, which helped member states support their economic and social development programmes.

"As for 2006, there is a general view that the rapid economic growth in countries such as China and India, will moderate somewhat reducing the demand side pressures on prices. However, this may well be offset by the upward speculative pressure due to the continuation of political tensions in the major producing regions of the world, thus maintaining the relatively high price. " Replying to a question, AL Turki derided US President George Bush's statements that the Untied States should reduce its reliance on oil impost from the Middle East and said they "defy conventional wisdom." "On average, the US consumes around 22 mb/d and 60% of that is imported.

Of imported crude oil more than 17% originates in OAPEC member countries (2.240 mb/d) with Saudi Arabia at the forefront at around 1.510 mb/d accounting for more than 11.5% of total US imports.," he said.

"Its worth noting, however, that although the volume of US imports from the Gulf puts it at par with US imports from its North American neighbors, there is a distinct comparative advantage in that most OAPEC members are endowed with large proven oil reserves and low production costs and thus will continue to play a significant role in meeting US oil demand. By 2025, contrary to the Bush Administration claims, one in every four barrels of its oil exports will be produced in the Middle East according to the Energy Information Administration (EIA) of the US Department of Energy.

"He added that the "unfortunate" aspect of Bush's speech, as he tries to regain the trust of his people by promoting a "domestic agenda" is that it sends a very "negative message" to our producing countries that have gone to great length in opening dialogue channels with their counterparts in consuming countries.