Oil And Energy Industry In UAE

Oil And pushing assiduity In UAEThe UAE is a rich source of innate(p) resources and it has substantially developed itself as a major(ip) player in the petroleum and gas application. UAE is one of the segment countries of OPEC and has been given a remarkable dumbfound in cover and gas application all over the world by having 10% guardianship of total vegetable inunct color militia of the world in the federation (Hellyer). The central theme of the report is to break the inunct and gas industry of UAE nation so as to analyze the contri aloneion and impact of vegetable oil and gas industry to the GDP and economical development.Fundamentals of the Oil and Energy IndustryHistorical instruction of the Oil Sector around the WorldThe UAE is a member of the OPEC since 1967 and holds superior position in terms of the oil and gas industry with the federation holding of 10% of the total oil reserves of the world. The early holds lucrative prospects in the natural gas field a s it would cater to the manufacturing industry, generation of power and petrochemical industry by providing a source of fuel. Abu Dhabi and Dubai are the two prominent emi order responsible for the success and growth of the oil and zip fastener sector in the U.A.E. (Energy and UAE)Importance of Oil in the UAEThe UAE is essentially an imperative go forthr of oil to global heartiness markets, by making around 10% of the overall global add together of raspy oil reserves. In terms of oil exports, UAE accounts for nearly 30% of its gross domestic product neat a mainstay in the economy.Also, UAE is emerging as a relevant consumer of energy in increase to cosmos an master(prenominal) global supplier of energy. The UAE will continue to maintain its long convention of being responsible energy stewardship owe to its diversification and development of economy acceleration of growth of incremental hydrocarbon reserves and bring significantly towards the performance and development of new(prenominal) alternative sources of energy (The UAE and Global Oil Supply). end product and ReservesProductionS.NoParticulars energy(2011)Oil Production3,096.34 (Thousand pose Per Day)Crude Oil Production2,687.67 (Thousand Barrels Per Day)Natural Gas Production1,811 (Billion Cubic Feet)Electricity Production81.08 (Billion Kilowatt-hours)Source http//www.eia.gov/countries/ uncouth-data.cfm?fips=tcReservesS.NoParticularsCapacity(2011)1.Oil proved reserves97.8 (Billion Barrels)2.Natural gas proved reserves214 (Trillion Cubic feet)Source http//www.eia.gov/countries/country-data.cfm?fips=tcOPECBackground of OPECThe Oil Producing Exporting Countries (OPEC) has been established with the sole purpose of stabilizing the outlays of oil in the member countries and also to impose quotas so as to disallow the wrong and over usage of natural resources which dissolver to their extinction sooner than expectation. As per the current information, OPECs combined reserves accounts for 1190 billion barrels of oil. tally to the 2008 agreement, the fruit cut was imposed on the existing quota and continuing to till now. Facts reveal that the OPEC countries produce 2 million barrels a day in excess of the permitted capacity of 24.845 million barrels per day(Alternative Energy Sources Synthetic Fuels Renewable Energy).Source (OPEC share of world crude oil reserves)Effectiveness of OPEC in achieving its ObjectivesOPEC was in the beginning formed to keep a check on the oil prices and bridging the gap of demand and supply in the global oil market. But still the quota implementations are not followed by various countries resulting in the production of oil more than the permitted quota. According to the claims of OPEC, the fluctuation in the prices is not due to the changes in demand and supply but due to the overproduction oil other than the allotted quotas (Sousa).OPEC and Oil prices in the last 4-5 historic periodThe followe figure shows the fluctuations in the global oil prices with the adherence of OPEC rules associated with oil productionhttp//gailtheactuary.files.wordpress.com/2012/02/world-oil-supply-and-brent-oil-price.pngSource (Why oil prices are so high Production shortfall, Iran concerns, and low interest rates)OPEC Quota and how it has changed over timeThe OPEC quota for the production of oil for UAE is 2.23 million barrels per day.It had joined OPEC in 1967 and is the Full Member country. It produces 2798000 barrels of oil and exports 3.32% of oil in all over the world. It is ranked as the 6th largest country for the oil reserves in the world. The OPEC aims at providing the stabilization of the price of oil as regards the member countries and also the imposition of quotas as will prevent overutilisation of the resources which could lead to finishing up of oil reserves sooner than expected. OPEC decides the production quotas for its member countries as per the global requirement of oil which could be changed by the OPEC as per the str ategic decisions pertaining to conservation, preservation, demand and supply of the oil globally (Sousa) .Source (Sousa)Role and the influence of the UAE within OPECUAE become the member of OPEC countries in 1967 and acts as an energetic member since 1974. Since then it act as a major contributor of oil and gas industry among OPEC members. It provides the constant source of oil to the consumers of OPEC by providing approximate 2.3 million barrels of oil per day. In addition to the supply of traditional sources of energy, UAE also contributes to provide new alternatives of energy through substantial development. (UAE contributes to global energy sector OPEC)Effect of a quota cut by OPECThe quota cut by OPEC will affect convalescence of economy in the global market. As per the evidences, the quotas cut is not helping in controlling the price issues of the oil and gas industry rather it is increasing the problem as countries tends to produce oil other than the permitted quota. The hi kes in the prices of oil will increase the prices of other commodities resulting increase the rate of inflation and slowing experience the economic development. (Pirog)AnalysisAccording to the data obtained from the Journal of Oil and Gas, the UAE is an important producer of oil, holding significantly seventh position in terms of proven resources globally. The UAE has been able to sustain its global reserves owing to the advanced enhanced oil recovery technology, EOR being implemented that leads to increase in extraction rates of several major projects in oil sector. The technology combines with high oil prices eventually to make reserves more commercially viable (United Arab Emirates Energy Data, Statistics and Analysis)The policies and procedures of oil in the UAE is primarily carried out by the governing body under the flagship of the Supreme Petroleum Council, through ADNOC operating at every level of oil and energy sector in UAE. The government has pushed back several its pla ns to increase capacity in order to increase the production capacity of crude oil (United Arab Emirates Energy Data, Statistics and Analysis).UAE economy, underpinned by its wealth in oil, has recorded a steady growth over the last couple of years. In terms of oil GDP, the figures have twofold from AED 387.8 billion to AED 934.3 in last assessment year.Recent Development in Oil Sector of UAEWith the approach of Habshan-Al-Fujairah pipeline for the purpose of carrying oil from oil fields of Abu Dhabi to the exporting port has been essentially proved as a strategic and economic advantage for the overall sector of the country. The pipeline extending 350 kilometers from oil fields and with this the country will be able to export 1.5 million oil barrels in a ace day. (Asoomi)Alternatives to Oil IndustryKeeping in mind the limited availability of fossil fuels and to prevent its overuse to meet the worlds growing energy demands, various alternatives to energy sources have been identified . Unconventional alternatives turn Natural Gas (LNG) is the upcoming form of natural gas which provides an excellent alternative to conventional natural gas usage. GTL is not only a beneficial alternative but is also milieu cozy as there are no harmful emissions on its combustion. Oil sands also provide a source of the extraction of oil from it and its use is significantly increasing with time. The only limiting broker is the increasing cost of setting up the required infrastructure and cost of mining and extraction of oil from it. However the oil sands are accompanied by noxious fumes which are contributing to the global warming issue (Alternative Energy Sources Synthetic Fuels Renewable Energy).Bio-fuels have been the outcome of recent developments in scientific researches. In this the organic matter is used to derive hydrocarbon based fuels such as Biodiesel, ethanol, etcetera The conventional sources of energy include solar, wind and hydro energy all of which are renewable and 100% environment friendly. (Alternative Energy Sources Synthetic Fuels Renewable Energy) .Recent DevelopmentsUAE has been involved in many new projects including increase in crude oil production to 4 million barrels per day by 2020. This would results to the increase in 40% from current capacity. The major upcoming projects include Bourouge complex expansion projects and the Habshan Gas Complex Expansion. UAE is readiness to garb $ 6 billion to develop the infrastructure of oil and gas industry. Abu Dhabi government is planning to invest $ 20 billion in Masdar to develop alternative energy resources to oil and gas industry. (Oil Gas Directory diaphragm East)Future ScenariosFuture plans of the OPEC and the UAE Oil sector and their effect on the EconomyTo promote fair and persistent oil prices and strategies of capacity expansion.To examine the technological, economical, political growth and development pertaining to the oil energy and other important sectors.To encourage the oil consuming nations for the enhancement of investment associated with downstream sector.To promote the technological development in order to addressing the issues pertaining to the climate changes.To minimize the bad impact of environmental issues on the developing countries which exporting fossil-fuel (OPEC semipermanent Strategy).Impact of Oil and Non-Oil Alternatives on the future of the UAEOil sector is one of the essential components contributing towards the countrys economy with special economic consequence on rate of inflation, consumer spending and eventually cable car sales of the country. The boom in the oil sector is bringing a gradual shift from job and fishing to oil sector, making UAE depending heavily on petroleum and crude oil as a main source of foreign exchange wampum.The real output growth of the country is increasing owing to the rising hydrocarbon production and other non oil sectors, especially trade, logistics and services eventually bearing a copul ation economic growth revival.RecommendationsIt is recommended to grab the opportunity from joint ventures to develop the sources not only in Dubai but also all over the UAE.Need to pay attention to other prevailing sectors such as banking, real state, telecom and aviation in order to increase the GDP and economic development.Identification of violate source of material and labor should so as invest in major projects along with the implementation of Green initiativesConclusionOil and Energy is a certainly a very important sector of the world that nourishes and contributes as a largest part to the GDP of the country. The production of oil leads to the production of various by-products and indeed the oil producing and exporting companies in UAE earns great revenue. At the same time, country earns most of its export earnings from oil and gas sector. On the other hand, due to emergence of other non oil sectors and slow economic growth, the sector is now facing several challenges inclu ding the challenge of diversification and privatization.