The governments of Abu Dhabi and Japan signed on Thursday a memorandum for joint cooperation under which Abu Dhabi will store its crude oil in Japan. The Abu Dhabi government was represented in the signing of the memo by the Supreme Petroleum Council (SPC), while the Agency for Natural Resources and Energy acted on behalf of Japan. The memo, the first one inked by the government of Abu Dhabi in this field, will help Abu Dhabi boost its relations with Asian markets and Japan in particular in a way that ensures regular supply of crude oil to these markets in case of emergencies. The initiative stems out of Abu Dhabi's strategic plan and instructions of its wise leadership. The plan is set to go into operation by the final quarter of the current year. Abu Dhabi National Oil Company (ADNOC) will execute and follow up the vital project. The initiative, which was released by Abu Dhabi early this year, has been well received by Japan. The Japanese government has signed a memorandum for joint cooperation with it's counterpart in Abu Dhabi, which will see the East Asian country storing the UAE capital's crude oil supplies. The memorandum was signed in order to help Abu Dhabi boost its relations with Asian markets and Japan in particular in a way that ensures regular supply of crude oil to these markets in case of emergencies. The agreement is the first of its kind signed by the government of Abu Dhabi. The plan is set to go into operation by the final quarter of 2009. The Abu Dhabi National Oil Company will execute the project. Meanwhile, the UAE economy, the second largest in the Arab world, will contract by 2.4 percent this year as crude oil production falls and sectors from finance to tourism slow, Credit Suisse Group said. “The economy is faced with numerous challenges at present, including not only the lower oil prices and the cutbacks in oil output, but also the moderation in cross-border financial flows, declining external demand for non-oil exports, falling tourism receipts and the property-market downturn,' Credit Suisse analyst Berna Bayazitoglu said in a report dated June 17. The International Monetary Fund forecasts that the UAE. economy will shrink 0.6 percent this year and expand 1.6 percent in 2010. Gross domestic product will grow 2.9 percent next year as oil prices and production increase, Credit Suisse said. Its average oil price assumption for this year is $50 a barrel and $58 a billion for 2010. The inflationary environment of last year will turn to deflation as consumer prices fall 0.6 percent this year and decline 0.8 percent in 2010, the bank said.
