The UAE contains proven crude oil reserves of 97.8 billion barrels, or slightly less than 8% of the world total reserves. Abu Dhabi holds 94% of this amount, or about 92.2 billion barrels. Dubai contains an estimated 4.0 billion barrels, followed by Sharjah and Ras al-Khaimah, with 1.5 billion and 100 million barrels of oil, respectively. UAE has undertaken a number of partnerships with foreign oil giants, to facilitate technology transfer and in turn improvement in efficiency. Expansions have been planned in almost all the existing oil fields within UAE. The country is in a position to expand too, considering the amount of crude oil reserves that it possesses.
UAE pumped an average of 2.53mn b/d of crude oil in 2006, as compared with an average production of 2.45mn b/d for the year 2005. This increase in production puts output around 100,000 b/d ahead of the OPEC quota level that has been elevated at successive OPEC meetings. The rise in production was made possible by the completion of scheduled maintenance work at a number of prominent fields in Abu Dhabi and output is now running at very close to what is judged to be sustainable capacity levels. In the expectation that demand will continue to soar, Abu Dhabi is investing some its high oil revenue to increase capacity. According to the Energy Minister, the field development program would raise capacity to around 3.5m b/d within five years from now.
Several projects to upgrade infrastructure at existing oilfields are planned or underway. Investmens are in both upstream and downstream projects. Recently, the UAE Supreme Petroleum Council awarded ExxonMobil a large equity stake in Abu Dhabi’s Upper Zakum oilfield, underlining the emirate’s commitment to working with international partners. The agreement gives the US energy giant 28% ownership of the offshore field. The stake held by the Abu Dhabi National Oil Company (ADNOC) fell to 60%, while Japan Oil Development Company retained its 12% stake. ADNOC aims to boost production at the field to 750,000 b/d, up from 550,000 b/d at present.
According to a report by Energy Information Administration of US, several projects to upgrade infrastructure at existing oilfields are planned or underway. A project to increase the capacity of the onshore Bu Hasa field is underway, including construction of natural gas separation units, drilling of natural gas re-injection wells, and water injection. A natural gas re-injection project also is planned for the onshore Bab field, which is expected to increase capacity to 300,000 bbl/d from the current 200,000 bbl/d. Upgrades planned for the onshore Sahib, Asab, and Shah (SAS) fields are set to raise capacity from the current 385,000 bbl/d to 465,000 bbl/d.
On another side, the UAE’s natural gas reserves of 214.4 trillion cubic feet (Tcf) are the world's fifth largest after Russia, Iran, Qatar, and Saudi Arabia. The largest reserves of 198.5 Tcf are located in Abu Dhabi. Sharjah, Dubai, and Ras al-Khaimah contain smaller reserves of 10.7 Tcf, 4.0 Tcf, and 1.2 Tcf, respectively. In Abu Dhabi, the non-associated Khuff natural gas reservoirs beneath the Umm Shaif and Abu al-Bukhush oil fields rank among the worlds’ largest. The past few years have seen the UAE embark on a massive, multi-billion dollar program of investment in its natural gas sector including a shift toward natural gas-fired power plants and the transformation of the Taweelah commercial district into a natural gas-based industrial zone.
The Dolphin Project is a US$3.5bn pipeline project to supply the United Arab Emirates with Qatari gas. The project designed to export 3.2bn cubic feet a day of natural gas to the UAE from Qatar over the next 25 years. The poroject is 51% owned by Mubadala, an Abu Dhabi government company, with the remainder divided between Total of France and Occidental Petroleum of the US. The pipeline is seen as crucial in UAE to meet its growing population's increased energy demand.
The Dubai Mercantile Exchange (DME) is a commodity futures exchange with emphasis on oil products including sour crude and fuel oil. DME positioned to provide price transparency and market liquidity for crude oil and petroleum products from the world’s foremost oil producing and exporting region. It is the first energy futures exchange in the Middle East, based in the Dubai Internatinoal Financial Centre. DME is a 50/50 joint venture between the New York Mercantile Exchange (NYMEX) and Tatweer, a member of Dubai Holding. However, by the end of November 2006, the Sultanate of Oman’s Ministry of Finance announced that it has reached a consensus for agreement with DME to acquire a 30% equity stake in it.
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