Oil in Abu Dhabi

Although Abu Dhabi is emphasizing on diversifying its economy to services and tourism oil still remains an important component of revenue creation.

The city is expecting to join 13 international oil companies to build 2 sour gas fields with the hope of producing over 3bn cubic feet of gas a day. The estimated cost is approximately 5-10 bn USD. There is some concern that it can create an over supply. To explain it simply sour gas is similar to the regular forms of natural gas but has a high hydrogen sulfide content which makes it very corrosive and dangerous.

Abu Dhabi has the biggest fossil fuel reserve in the region and is the 4^thbiggest natural gas producer in the world. Abu Dhabi produces 95% of the UAE’s natural gas which is a necessary component of the economy in producing electricity and water desalination. Abu Dhabi’s economy is so huge that even the non oil sector is greater than the total of all of Dubai’s economy. Abu Dhabi also had its highest oil production last year with supplies increasing from 2.7 million barrels per day to 4 million last year. Hydrocarbon extraction accounts for approximately two thirds of GDP.    Mubadala, the government investment company has used the enormous oil wealth generated to support the growth of new businesses in the emirate with the aim of strengthening the economic diversification program.