Current Oil Industry in Dubai

By Jasdeep Kaur

In the 19th century, Arabs depended on barter and trade of gold and pearls for survival. With the discovery of oil and gas in the sixties, the scenario changed. Oil and gas are the nerves of UAE since 1962 and it is the 4th largest producer in the world. The country was not under developed back then. Today, it is the backbone of the economy. In the year 1962, petroleum was first exported. Petroleum dominates the economic power of the city. In the 20th century, the trade was upgraded to the rich oil resources. Oil trading became the primary source of trade and revenue in the Emirate. With the transformation of the trading materials, the city moved on with a fast pace. In 1985, it reached the highest per capita income in the world with US $19,120. This brought all round development in the region. Various job opportunities also attracted professionals and unskilled labour from Asian countries. Unlike oil production the region did not have much infrastructure for agriculture, fishing, sheep rearing, herding or poultry. Although Abu Dhabi is the richest in terms of oil production, it is Dubai which is more recognised as the industry leader in other sectors. At one point smuggling activities dominated the port areas of Dubai, all that has now changed. It has become a flourishing business centre amongst the GCC.

The oil industry is still controlled by the government. They know that it is this produce that brings them on the forefront of development in other sectors. They also know that the oil reserves are likely to dry up in the coming 20 years. They are producing 240, 000 barrels a day and good quality of gas from offshore fields. The main offshore fields are Fateh, Southwest Fateh, Falah and Rashid. The Margham onshore deposit field is in isolation. The Dubai Petroleum Company is the main facilitator in this part. The UAE has helped to stabilise the oil industry in the region and the world. Its rulers have positive and a very balanced way of handling the price structure. It participated in two major petroleum cuts in 1998 and 2000. This was critical to survival of the economy and OPEC also. In 1998 they reduced production by 1.7mbd. In 2000 they also were agreeable to holding the OPEC summit in Venezuela to strengthen world oil supply. They also joined the mega-project of Dolphin initiative where the DSA (Dubai Supply Authority) agreed to buy off Qatari gas. This move consolidates the UAE's policies on oil trade in the region. Dubai contributes 2% of gas reserves of UAE. The state's Dubai Natural Gas Company produces natural gas in the offshore fields and a gas piped from Sharjah. The rulers are being taken seriously by the world community in other sectors.

The natural oil gas industry is still worth its weight in gold, the rulers have become more practical by diversifying in sectors which are proving to be an asset to the economy.