UAE Oil and Gas Industry: Reserves, Exploration, and Production

The United Arab Emirates (UAE) has the seventh-largest proven oil reserves in the world at 97.8 billion barrels, according to the Oil and Gas Journal in January 2009.
The UAE also has the sixth-largest proven natural gas reserves in the world at 214 trillion cubic feet. It is an important oil and natural gas producer and is a member of the Organization of the Petroleum Exporting Countries (OPEC).
The UAE is a federation of 7 emirates with the second-largest economy in the Arab Middle East after Saudi Arabia.
The emirate of Abu Dhabi is the focal point of the UAE’s oil and gas industry,
followed by Dubai, Sharjah, and Ras al Khaimah. While Abu Dhabi is the hydrocarbon and industrial center,
Four decades since oil production first began in the United Arab Emirates.
In the 1930s, the consortium of what became BP, Partex, ExxonMobil, Shell, and Total, operating in Iraq as the Iraq Petroleum Company, turned their eyes to the Lower Gulf.
IPC established a subsidiary, Petroleum Development (Trucial Coast), PD(TC), which drilled its first well at Ra’s Sadr, north-east of Abu Dhabi, in 1951.
PD(TC) drilled several other wells before finding traces of hydrocarbons at Murban (now known as Bab), south-east of Abu Dhabi, in 1954.

In 1953, an exploration and development agreement covering all the remaining offshore areas of Abu Dhabi had been signed with D’Arcy Oil Company, but two years later its concession was reassigned to a newly-created venture called Abu Dhabi Marine Areas (ADMA).
ADMA, which was owned by a group of foreign companies including Total and British Petroleum (BP), made its first commercial oil discovery at Umm Shaif in 1958, as a result of which a production and processing center and an export terminal were established on nearby Das Island.
The first export shipment of Umm Shaif crude left Das Island in 1962, and three years later ADMA discovered the Zakum oilfield, which was immediately developed and entered production in 1967.
The first well was drilled on a structure called Umm Shaif in 1958 and struck oil in massive quantities.
With Das Island as the export terminal, Umm Shaif went into production in 1962.

In 1971, the emirate established a national oil company, Abu Dhabi National Oil Company (ADNOC), to take over the state’s interests in all oil and gas fields.
The law authorized ADNOC to operate at all levels of the oil industry, both at home and abroad, and one of its first steps was to take 25% holdings in the two concessionary companies, ADPC and ADMA.
On January 1, 1973, less than a year after a Japanese consortium called Japan Oil Development Company (JODCO) had acquired a 45% interest in ADMA, ADNOC raised its stake in each company to 60% in January 1974.

The Iraq Petroleum Company (IPC) held a concession for Dubai from 1937 to 1961. CFP and Compañía Española de Petróleo (Spanish Petroleum Company–Hispanoil) obtained an onshore concession in 1954 and formed Dubai Marine Areas (Duma).
Continental Oil Company acquired the IPC concession in 1963 and formed the Dubai Petroleum Company (DPC).
That same year, DPC acquired 50 percent of Duma and released some of its shares to other companies.
Oil was discovered offshore in 1966, and production commenced in late 1969. The Dubai government acquired a 60 percent share in Duma DPC in 1975.

In 1969, the emir of Sharjah granted a forty-year concession for offshore exploration and production to a consortium of small United States oil companies known as Crescent Oil Company.
Oil was discovered in 1973 in the Mubarak field off the island of Abu Musa, and production began in 1974.
By late 1983, output reached 35,000 bpd of condensate, which was exported. In 1984, total production reached 62,000 bpd.

Ras al Khaymah has limited oil and gas reserves, which were initially exploited in the early 1980s. By 1986, production was about 10,000 bpd, with most of the revenues plowed back into exploration and development.
In that year, the Emirate had completed pipelines from its offshore As Sila field to the mainland and had established separation and stabilization facilities, storage facilities capable of holding 500,000 barrels, and a 1,000-bpd LPG plant. By 1991, production had plummeted to 800 bpd.
Exploration and drilling in Ajman, Umm al Qaywayn, and Al Fujayrah have not yielded significant finds. Some of this activity has been funded by the federal government.
Abu Dhabi contains 95% of the oil and 92% of the natural gas resources of the UAE.