Oil Discovery In The UAE

The prosperity of the United Arab Emirates and its rapid transformation from a backward
desert region to one with a booming economy have been made possible by revenue from oil
exports. The UAE possesses nearly 10 per cent of the world's total reserves, and there is no
doubt that oil will continue to provide the income for both economic growth and the expansion
of social services for several more decades at least. In the coming years, natural gas will play
an increasingly important role in the UAE's development -- particularly as a fuel source for power
generation, petrochemicals and manufacturing industry. The UAE has also taken the initiative in
developing an intra-Gulf gas network that could eventually link up with the Indian subcontinent.
Early in 2000, the UAE marked the fiftieth anniversary of the drilling of the first oil well
at Ra's Sadr, north-east of Abu Dhabi. It was an inauspicious start for the oil industry, because
the well proved to be dry. Not for another decade were major discoveries made, although the
Trucial States (the areas which became the UAE in 1971 after the British withdrew from the
Gulf) swiftly made up for lost time. In a matter of a few decades, Abu Dhabi, supported by
Dubai, turned the UAE into one of the major players in the international oil export industry.
Proven recoverable oil reserves in 2000 were put at 98.8 billion barrels. At the same time,
proven recoverable reserves of natural gas in the UAE were estimated in 2000 at 6 trillion
cubic metres, or 4 per cent of the world total. This makes the UAE's gas reserves the third
largest in the Middle East (after Iran and Qatar) and the fourth largest in the world (with Russia
holding the biggest reserve), although -- as will be explained later in the chapter -- gas production
in Abu Dhabi is never likely to be as economical as in some other Gulf states.

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