'EXPORT CORRIDORS OF THE WORLD: UNITED ARAB EMIRATES,' PETER HIPKIRK, DR. K. G. FENLON, RALPH IZZAZRD, TIM OWEN AND ROGER VIELGVOYE, THE TIMES, (LONDON) 23 MAY 1974.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01194A000100630001-6
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 9
• Document Creation Date: November 11, 2016
• Document Release Date: August 6, 1998
• Sequence Number: 1
• Publication Date: June 14, 1974
• Content Type: REPORT

25X1C10b
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ichest state se,eks
more than oil
by Peter Hopkirk
Arabian "Gulf as the Arabs
jah, Ajman, Umm al
Qaywayn, A] Fujayrah and
miles down the Gulf. Since
the turn of the century this
century jackpot.-Thus began
what is norhans the most
story of modern times.
In the past 10 years, Abu
Dhabi's income from oil-
and it has no other - has
soared-from a few thousand
pounds in 1963. to an ex-
pected #1,500m this year.
The tripling of the price of
crude "oil in the last quarter
of-1973 has brought amazing
extra wealth to a country
already overloaded, if, not
actually embarrassed, by
riches.
Today this former fishing
village is the El Dorado of
the lower Gulf. It is besieged
by foreign bankers and busi-
nessmen, expatriate advisers,
and armies of skilled work-
ers from neighbouring coun-
tries, all hoping to win a
stake in the Abu Dhabi mira-
cle.
Because of this invasion,
the hotel crisis in this Ara-
bian boom town is so acute
that visitors have to double
up. sometimes three exec-
utives sharing a room. But
no one complains-not even
at the harrowing prices
charged-for all eyes are on
the crock of gold. Moreover,
everyone is anxious to be
clear of the Gulf before the
crushing summer heat starts.
Even in the spring the tem-
perature can reach 100? F.
Under the constitution,
Abu Dhabi was to act as the
federal capital for the first
five years only. Meanwhile a
permanent capital would be
built in the desert astride
the border between the emi-
rates of Abu Dhabi and
Dubai, the two dominant
members of the UAE. It now
seems unlikely that the new
capital will ever be built.
The fast-growing Abu
Dhabi, with its high-rise
office blocks, its embassies,
federal ministries, inter-
national airport and cascad-
ing municipal fountains,
seems to have staked a per-
manent claim to the title.
After all, Shaikh Zayed's
oil wealth provides most of
administration and the de-
velopment of the smaller
emirates, where no oil has
yet been discovered. Ajman,
Ras - a] Khaymah, Umm a]
Qaywayn and Al Fujayrah
would today be as poor, as
Abu Dhabi was before its
windfall were it not for the
generosity of Shaikh Zayed.
The visitor to Abu Dhabi -
today can almost watch it
growing, like one of those
exotic plants which open
before your eyes. In the
-great open spaces just back
from the dual carriageways,
huge roundabouts and futur-
istic architecture, it is one
vast construction site. Out of
the sand, as far as the eye
can see, rise half-completed
buildings. This year alone
more than 50 are due to be
finished.
Among the new tenants
are the international banks,
and wherever you look tney
are putting up their name-
plates. A few years ago there
was only one bank, a branch
of the British Bank of the
Middle East. But today the
capital's fiscal arrangements
have advanced a long way
since the previous Ruler,
ousted only in 1966, used to
store the emirate's entire
revenue in a cupboard in his
palace, until it was discov-
ered that rats had gnawed
through several cubic yards
of bank notes.
To cope with this fever-
ish activity, both in his emi-
rate and in the federal ad-
ministration, Shaikh Zayed
has had to import a large
foreign work force, and
today more than 7,000 civil
servants wrestle with the
mountains . of paper work
and other problems. They
come from the surrounding
Arab countries, including
Iraois, Palestinians, Egyp-
tians, as well as from
Europe. Two of Shaikh
Zayed's key advisers are
Britons: Mr John Butter
and Dr K. G. Fenelon, experts
nn finanra n.7 er,r;o*;~C
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It would be possible or a
foreign visitor to spend
week in Abu Dhabi without
so much as meeting on
native-born Abu Dliabian
Foreigners account for
high proportion of the
emirate's population, which
has all but trebled since the
last- census of 1968. It is no
estimated at about 120,000,
largely spread between the
capital and the inland, oasis
town of Al Ain. A more
detailed census of the
i)'AE is to be carried out
next year, which should a.s;,
see the publication of the
first national plan for the
seven emirates.
Abu Dhabi has been built
entirely on oil. Unlike
Dubai, and despite its new
port, Abu Dhabi has no en-
trepot trade worth speaking
of. Only about 2.5 per cent
of its imports are reex-
ported, against 50 per cent
or more of Dubai's. WVei-
someone to find a source of
energy to replace oil, t.her,
Abu Dhabi could virtually
disappear overnight.
The perils of a single pro-
duct economy are something
t%1at Shaikh Zayed and his
advisers are well aware of.
They have not forgotten
what happened to their pearl-
ing industry in the late
1920s and early 1930s when
Ja ianese ingenuity flooded
the world market with cul-
tured pearls. The Gulf pearl
industry, which had replaced
piracy as its main source r,#
income, collapsed, bringing
poverty once more to the
region.
But then economic in.
terdependence is one of the
basic purposes Of the fever:
tron. IF mie of the emirates
is struggling, as the notthern
ones are at present, then the
others help out. It -s Abs
Dhabi's turn to h^]r
today, and it is showing con,
siderable generosity tolvard-
the poorer states. It could b,
Dubai's turn tomorrow, with
its It
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of
Oil to us is a bonus,
al sit a very large one ", a
D bai businessman told me.
" e would still be lrich
ess
wi hout it, being
v nerable than most to
n clear power, tar sands, oil
shale- coal liquefaction or
a ping else the scientists
m y come up with."
It has been suggested that
o ce Abu Dhabi's oil wealth
b gins to pile up, the emi
it te's tiny population could
Ii 'e. comfortably off its in-
v stnients in the West and
e sewhere if the demand for
o i ever fell off. At present
u Dhabi's surplus wealth
i modest because of heavy
s ending on development
Aid generous aid to others.
However, there, should soon
a considerable surplus for
i vestment outside the UAE.
Li i ng off savings or
i vestments is not seen by
haikh Zayed as the answer
or Abu Dhabi, which he
ore than anyone hopes to
ee as part of a closely knit
deration with each emirate
r king its contribution. An
ager search to find exports
esides oil and petrochemi-
:als is being pursued in Abu-
.habi, as well as throughout
he United Arab- Emirates.
ut just what the. Shaikh. has
o offer the world besides oil
t is hard to see.
Tourism, that inter-
tatioilai cure-all, is being
poken of enthusiastically,
although because of the ex-
treme heat and humidity of
the Gulf, this would have to
be confined to the winter
months. A really modern
fishing industry, with quick-
freeze facilities aboard the
mother vessels, is another
export possibility. Already is
is the major- occupation of
the inhabitants of the two
smallest emirates, Umm al
Qaywayn and Ajman.
Meanwhile work has
started on a cement plant in
Al Ain which will use locally
quarried materials. Initially
for domestic consumption, it
is hoped that when the
present pace of development
has. levelled out, there could
be a market elsewhere in
the gulf for Abu Dhabi
cement. However, there is a
danger of the Gulf region
ending up with an embar-
rassing surplus of cement. In
the UAE alone there are two
other cement factories going
up.
One, being built by Rich-
ard Contain of London in
Dubai at a cost of #9m, will
yield 500,000 tons of cement
annually when completed
next year. The other,
financed by Abu Dhabi, is
being built in Ras al Khay-
mah, northernmost of the
emirates. In other countries
around the Gulf, including
Iran and Iraq, there are now
cement industries, all of
which, moreover, hope to
export once their domestic
requirements have levelled
off.
A number of new oil-based
industries with export hopes
are planned for Abu Dhabi.
These include a petrochemi-
cals complex yielding such
products as PVC and caustic
soda, a chemical plant to
produce chlorine and ozone,
a small sulphuric acid plant
with an output of about 50
tons a year; and a plant pro-
ducing organic residue. In
addition, Abu Dhabi is to
sell three million tons of
liquefied natural gas to
Japan a year.
in
Trade prospers
Smugglers' creek
Half an hour by air up the iffs and liberal policies have
desolate coast from Abu attracted trade for many
Dhabi-or . 100 minutes by years, and today it is the
the fast new desert road- supermarket of the Gulf, with
lies Dubai, the Hongkong of a monopoly on the entrepot
the Gulf. This flourishing trade of the whole region.
.city state, astride its famous Its real leap forward into
Creek, is the second wealth- the twentieth century began
iest of the United Arab Emi- in the late 1950x, when its
Ruler saw that if the Creek
thought would prove to be a
white elephant, is to be en-
larged. A huge dry dock for
the supertankers of the Gulf
is being built alongside Port
Rashid and soon Dubai is to
become a free port, hoping
thus to attract new industry
and investment.
Just as Abu Dhabi is built
on oil, the prosperity of
Dubai is largely built on
gold. Smuggled gold, one
should add ; although, for the
time being, this traffic has
dried. up, being replaced by
other profitable lines like
watches.
The gold was bought
openly in London and Geneva
and flown to Dubai. There it
was sold to others who
smuggled it into India and
Pakistan, both traditional
markets for this metal, in
swift, diesel-powered dhows.
It was all quite legal-in
Dubai, at least, where Shaikh
Rashid keeps restrictions'on
private enterprise to the ab-
solute minimum. '
Just as fortunes were,
until recently, made out of
g6ld, today they are being
made from watches, razor
blades, medicines, textiles,
arms and other desirable
goods which leave Dubai in
the holds of her dhow fleet.
At least 50 per cent of goods
imported into the emirate are
subsequently reexported,
largely to India, Pakistan and
Iran.
A high proportion of these
goods evade, by various tra-
ditional and mysterious
means, customs officials at
the delivery end. Not for
nothing has Dubai been called
a " smugglers' supermarket ".
Of course the Duhai auth-
orities have no part in the
smuggling, and no Dubai laws
are broken. As one Dubai
merchant explained it to me :
" What a man does with the
goods he buys in a super-
market is no concern of the
management. If he chooses to
take them away and smuggle
them into another country
then that's his risk."
Evading customs means
not merely the evasion of
duty in India, or wherever
the goods are destined, but
also the evasion of prohibi-
tion laws on luxury goods.
The profits are often very
considerable on those goods,
which are thus doubly desir-
rates.
It-o~eh-ice re o~ ire-Trot Tmpto?ed Dubai mot--all Dubai's reexported
nra ee an its of revenue, is mig .t ose groun3 to other goods become contraband.
breaking world monetary re- Gulf parts, as Sharjah had Large quantities-especially
cords. At something like before it. Since then its building materials, household
510,000 for every man, growth has been remarkable, goods and foodstuffs-are
woman and child in the emi- culminating in the comple- carried overland to Muscat,
rate, Dubai's external trade tion of the splendid new for instance, while other
figures show the highest deep-water harbour. goods travel quite legally to
annual per capita movement Dubai's merchant prince, Iran. Some of the goods
anywhere in the world. Shaikh Rashid, more entrepre- which found their way to
Whereas Abu Dhabi is dis- near than just conventional Abu Dhabi by road, however,
tinctly nouveau . r riche Ruler, has further ambitions are now shipped there direct
Dubai's wealth -is several for the emirate. The 15-berth -" and unloaded at Port Zaved.
generations old. Its lord tar- port, which some people
which was opened i 1972.
However, the day I left
Dubai there were to faces
among the -dhow cre?,. S
busily loading their shapely
craft along the Creek. vi nrd
had just come through that
Dubai dhow had ben seized
by Indian customs zi~en with
its cargo of 27,0 Swiss
watches. For- the watch 'has
Largely replaced bullion as
the-smugglers' favorite. It
represents a lot of money con-
centrated into on small,
easily obtainable easily
marketable object.
Three million watches are
flown into Duba every
year, sufficient f r every
man, woman and child to
own 50. Ninety pe cent of
them are shipped straight
out again by dho for the
black markets of t e Indian
subcontinent.. Bec- os'
dhows of Dubai are
guishable from tie local
coastal- vessels. of India and
Pakistan it is not difficult
for them to lose tl c iseives
in the crowd on arrival. The
best hope of the' customs
.inspectors, who are now
equipped with I igh-speed
hovercraft, is to catch them
red-handed transferring the
contraband to local vessels,
or to intercept t e goods
smuggling trips ar
ful, such is the
Dubai's skippers,
whom have pirate
of the
success-
many of
~ blood in
rn dhow,
no longer dependent on the
fickle winds of t
went is made at
vaus, for Dubai's
do not want rupees. Instead,
settlement is usually made
through a complicated and
ends up in Dubai rather than
Delhi. Sometime-', however,
payment is made in Indian
silver.
. With the rise in silver
prices in the W~st a new
traffic has begu
"poor man's gold
" between
the dhow',
ches and
still adhering to t
bars. With each
#2,000, I calculat
ards now
silver in
to Switzer-
India was
lany of the
one worth
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pile before me was worth
more than #100,000.
One bored-looking soldier
with a Lee-Enfield stood
over this emir's ransom. I
asked a senior bank official
whether they were not afraid
of a bullion robbery. He
shook his head : "Where
could they take it? There's
the Empty Quarter to the
south, and if they tried to
ship it out by 'sea we would
have them in five minutes.
Anyway, it's so heavy that
each man could only carry
one bar."
The Indian Government
has now legalized this traffic
in silver, so the only risk to
the investor is of a dhow
foundering .in a storm. But a
man who likes to gamble can
still try his hand at arm-
chair smuggling by putting
Fxpanding econ
C Pby Tlr"Y{ G. Fenelon
In some countries, notably
Britain and Japan, the basis
for successful economic sur-
vival has been summed up in
the slogan " export or die " ;
for the United Arab Emi-
rates the slogan might well
be "import and live ". In
Abu Dhabi practically all
requirements, whether con-
sumer goods, consumer dura-
bles, motor vehicles, machin-
ery, building materials or
oilfield requirements, have to
be imported. For Dubai,
import and subsequent reex-
port is the lifeblood of her
economic existence.
Fortunately for the emi-
rates, there is no balance of
payments problem, nor is
there any shortage of .for-
eign exchange. Crude oil ex-
ports provide abundant for
eign exchange and are the
mainspring for the develop-
ment of the economy. Abu
Dhabi was the first and is
by far the most important
exporter of crude oil but
now oil is flowing also from
Dubai, though in much
smaller quantities. Soon
Sharjah will join the ranks
of oil exporters and several
of the other emirates live in
,hope of oil discqvery.
Dubai is unique among the
Gulf States as her wealth
and economic prosperity
were built up by trade long
before her oil exports began
in 1969 and her predominant
activities are still trade, com-
merce and transport. The
difference between the two
richest emirates is clearly
shown by comparing their
import patterns. In Dubai
about 43 per cent of the
'imports consist of consumer
goods such as foodstuffs, tex-
tiles, household require-
ments or watches and some-
thing like 60 per cent of
these imports, including
practically all the watches,
are reexported. In Abu
Dhabi about 70 per cent of
imports consist of construc-
tional materials, machinery,
oilfield supplies, and motor
IL
money into a smuggling syn-
dicate. Moreover, he can do
it with a clear conscience,
and certainly with no risk of
breaking any law - except
those he is safely out of
reach of. If his vessel gets
through he will probably
receive a telephone call
informing him that "Aunt
Fatima has arrived safely ".
The rewards, moreover, can
be considerable, and are un-
taxed.
0630001-6
Peter Hopkirk
yHyvill bolster region's importan
f e uc s but only a Sinai
raction, amounting in 1973
2.5 per cent, are reex?
nrtAd
Imports into the "federa'-
on as a whole amounted in
972 to about #250m and in
e o vine year
soared to some #370m. There
has been a great surge
in Abu Dhabi's con-
structional activities which
gathered momentum in the
second half of '1972 and have
continued ever since.
Prosperity in Dubai also
leaped forward during these
years, partly because of her
new-found wealth from oil
and partly because of in-
creasing activities in sur-
rounding countries which
called for her reexports.
Sharjah now has begun to
bound ahead as a result of
the activities involved in de-
veloping the oil find off Abu
Musa Island. The remain-
ing four emirates of Ras
al Khaymah, Ajman, Umm
al Qaywayn and Fujay-
rah are benefiting both
directly and indirectly from
the prosperity of their neigh-
bours . and from the eco-
nomic and financial aid ex-
tended to them by Abu
Dhabi. They have some agri-
cultural and fishing poteu-
tial though their production
is too small to meet anything
like the full needs of the
federation.
The value of imports per
head is high, notably in Abu
Dhabi and Dubai. Though
the population of the federa.
tion is a little over 340,000 it
is a rich and expanding
market. In 1973, imports per
head into Dubai reached the
high rate of about #240 a
month, but more than half
of these were reexported.
For Abu Dhabi the corre-
sponding figure was about
#90 Per head a month but
practically all the imports
were retained.
Britain retains
leadership
Imports into the
es re awn
from more than 70 different
countries, but for many years
the
been the United Kingdom,
Japan and the United States
with about half the total
"Inthese
three countries. The United
Kingdom has retained Iead-
ershap in Abu Dhabi over
the years'but?has had to be
content with third place
since 1972 in Dubai, where
the import pattern is some-
what different.
The United Kingdom leads
in machinery, chemicals, cos-
metics, stationery, alcoholic
beverages and arms and
ammunition. Japan has built
up a commanding position as
cycles and leads in textiles,
building materials, electrical
goods and photographic
goods. Import of motor vehi-
cles has been a growth
market and the percentage
provided by Japan has in-
creased steadily over the
years from 60 per cent in
1969 to 94 per cent in 1973.
By 1972 Japan had cap-
tured 96 per cent of the
market for motor cycles. It
is now becoming a somewhat
unusual sight on the roads
throughout the federation to
see a car or motor cycle of
recent vintage which is not
Japanese. Japan, 'however,
has not made any serious
inroads into the market for
heavy duty and specialized
n rotor vehicles.
The United States is well
ahead in oilfield supplies
and runs the United King-
dom very close in machinery
imports. Among other sup-
pliers there is a considerable
degree of specialization.
Switzerland, for example,
has carved out a large
..market for her watches,
worth about #lOm a year.
Australia does well in food-
stuffs and Iran in refined oil
products due to the proxim-
ity of her refineries.
China in 1973 came into
the top 10 importers into
Dubai-wirlr a trade- of sonic
~$m though in the previous
United year it had been less than
to t ies are
foodstuffs and' stationery.
The -statistics quoted follow
the usual nrarrirt- an A rplntp
.to, countries of provenance
(the immediate suppliers)
and these are not necessarily
ufacture or production. Brit-
ish imports therefore may be
a little higher than those
given in the tables as some
commodities such as books
may be listed as coming
from Lebanon or other coun-
tries to which goods are
transhipped, though manu-
factured in Britain. The
amounts involved however
are not large.
In the accompanying
statistical tables the trends
in the import'. pattern can be
seen over the past five
years. As practically all re-
quirements in Dubai, Abu
Dhabi and Sharjah have to
be imported, the volume of
imports is naturally geared
to the degree of economic
activity in the area. The year
1969 was a boom year in
Abu Dhabi when construc-
tional activities forged ahead
and this accounts for the
high level of imports that
year.
Activity fell off in 1970
and it was not until 1972
that the earlier level was
overtaken. Dubai weathered
the doldrums in better shape
as she was concerned in
reexporting consumer goods
over a wide area rather than
building materials and con-
structional goods. Neverthe-
less she felt the effects of
Abu Dhabi's relapse as that
emirate was among her im-
portant markets and the rate
of increase of her trade
slowed down.
Standards of living ere
now rising rapidly through-
out the -federation especially
among the native-born pop.
ulation. Concurrently the
demand for labour has in-
creased and wages of un-
skilled labourers have more
than doubled over the past
18 months in Abu Dhabi.
There is an acute shortage
of houses fiats-and office
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accommodation and many
multi-storeyed buildings are
being constructed to meet
the demand.
The rising standards of
living have already led to a
greater demand for all kinds
of imported products and
this trend is continuing.
These rising standards of
living, the increasing popula-
tion augmented by the immi-
gration of expatriate tabour
and large-scale development
activities such as a new re-
finery or the liquefied ,nat-
ural gas plant on Des Island
make it reasonable to
predict that the UAE will
become even more important
as a market in the coming
years. Activities are likely to
spill over to the less devel-
oped emirates, especially
when the new road systems
linking the Batinah Coast
with the Arabian Gulf Coast
are completed and the
planned connexions are
made with the new roads of
Oman. These developments
should open up new chan-
nels of trade and increase
the demand for imports of
all kinds.
Development of
services
With increasing wealth
and higher standards of
living, there is bound to be a
considerable development of
tertiary industries, that is
those concerned with serv-
ices, education, health, dis-
tribution, finance, insurance,
entertainments and leisure
occupations. The growth of
such activities will require
imports of the necessary
equipment and supplies as
well as building-up trade in
invisibles ".
Banking services Are. a
case in point. Considerable
expansion has taken place in
the provision of banking and
financial services And at
present 65 banks, not includ-
ing sub-branches, are oper-
ating within the fedeeration.
Well known banking names
from . the United Kingdom,
the United States, Pakistan,
Iran and France are already
represented and there are
several Arab and locally-
---established banks. Several
ire --alma t--to
open. Last year the newly
formed Currency Board
established a forward ex-
change market and now
operates clearing houses in
Abu Dhabi and Dubai.
Other financial institutions
are making their appear-
Table 1
Dubai's imports. Leading countries of provenance
(million dirhams)
Year Total
Imports
Share provided by
United United - W
Japan States Kingdom Switzerland Hongkong German' India
1973 .2341 529 329.. 281.._ _104- 98 .85.. 77
1972 1475 308 200 191 110 58 43 54
1971 1059 182 127 186 94 36 36 47
:1970 960 163 _ 88 197 g3 32 32 56
1969 922 _. 179 76-.. 161 _106- ... 29._ 39 42
In 1973 other importers in the top ten were Iran (DH 82m), China (DH 81m) and France (DH
58m). China had risen from DH 47m In 1972 and France from DH 33 m.
Table 2 .
Abu Dhabi's imports. Leading countries of provenance
(million dirhams)
Year Total Share provided by
Imports United United W The
Kingdom Slates Japan Germany France Netherlands Au tralia
1973 1019 280 203 126 72 64 29 15
1972 758 181 104 118 44 56 21 h4
1971 469 145 107 26 21 10 16 h1
1970 333 144 51 16 18 8 10 110
1969 593 200 115, 14 37 17 24 17
Table 3
Main commodities imported into Abu Dhabi and Dubai (million dirhams)
Abu Dhabi 1972 1973 Dubai 1972
Machinery 279 402 Machinery 250
Transport equipment 84 156 Textiles and clothing 215
Foodstuffs 69 79 Household goods 274
Iron and steel goods 62 99 Foodstuffs 199
Textiles and clothing 28 22 Building materials 153
Refined oil products 25 35 Oilfield supplies 165
Fuel and oil 84
In 1973 some of Abu Dhabi's imports, such as textiles, were recorded under Dubai's i
ance, such as the Sharjah
Insurance Company, and
there has been a( considera-
ble development in the pro-
vision of specialized services
for ocean-going oil tankers
operating in the Gulf. These
include such services as
arranging for crew changes
to and from moving oil tank-
ers, work-boat facilities for
off-shore oil rigs and air taxi
services. Soon there will be
a dry dock in Dubai capable
of servicing the largest oil
tankers afloat or likely to be
built in the future.
It is hardly necessary to
state that businessmen want-
ing to open up trade with
the UAE should visit the
area. A great number are
already doing so and almost
every week trade missions or
Chamber of Commerce and
Industry teams arrive in
Dubai and Abu Dhabi.
During recent months
there have been three Cham-
ber of Commerce missions
from the United Kingdom
and teams have come from
Australia, Hungary, the
United States, Japan,
France, Romania, South
Korea and many other coun-
tries. During the first four
months of this year 15 trc?.a
missions have been received
by the Abu Dhabi Chamber
of Commerce and there have
been several hundred indi-
vidual inquiries.
Most visitors favour the
cool season from October to
May but last summer there
were an unusually large
number of visitors even
during the hot months of
June to September. Hotel
accommodation is scarce
despite the opening of sev-
eral large hotels of inter-
national standard in Abu
Dhabi, Dubai and Sharjah.
In consequence it is often
difficult to arrange hotel
bookings at short notice.
Politeness and patience
are the two great virtues for
the exporter, contractor or
consultant working in the
Middle East. Many of the
merchants, importers . or
senior government officials
whom the visitor may meet
are w@ll-travelled and accus.
tomed to western modes of
life and behaviour but even
with the most sophisticated,
politeness and an under-
standing of local-customs are
highly regarded and never
come amiss.
Dr Fenelon is author of The
United Arab Emirates
(Longman) and statistical
expert to the Government
of Abu Dhabi.
1973
400
389
346
283
326
273
121
ports.
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 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100630001-6
Fortune turns benign for Sharjah
,after series ot,yersafs
tarmac highway from Dubai,
there is an endearing road-
side boundary sign: " Smile:
you are now entering Shar.
jah ". This state of 1,000
square miles within the
United Arab Emirates has
seen a series of reversals of
fortune during the present
century but now has much to
be happy about. Once more
it is living in expectation of
all assured income from oil.
Sharjah is the third lar-
gest state in the union and
has a population estimated
at 60,000. With three en-
claves at Daba, Fakkan and
Kalbah on the Gulf of Oman,
it is the only Amirate to have
access to. the sea . on both
sides of the Musandam pen-
insula. it is the only emi-
rate to have a common
boundary . with each of the
six others. On the western
shore, its territory entirely
encloses that of its northern
ttteighbour, the tiny state of
Ajman.
At the beginning of the
century Sharjah had more
wealth than all its neigh-
bours as the many fine man-
sions of the pearl merchants,
still standing in the old
town, testify. It was also a
prosperous entrepot doing
livelier business than Dubai,
its neighbour nine miles to
the south.
But hard times came in
the late 1920s with the col-
lapse of the pearling indus-
try. Traders also lost heart.
The creek which had en-
abled goods to be unloaded
straight into the suk was
allowed to silt up. Coastal
dhow traffic moved on to
Dubai, and the merchants
followed them.
In. recent decades Sharjah
has struggled on with no
-very visible means of sup-
port. There was a modest
income from the export of
red oxide which is used for
lipsticks and other cosmet-
ics. This amounted to about
16,000 tons a year, most of
which went to the Golden
Valley Company of Bristol,
England, but the amount
dropped off when contin-
uous burrowing in the mines
rendered them unsafe.
In the 1930s, Sharjah
became a staging point for
the flying-boats of Imperial
Airways. The RAF arrived
in 1942 -and -established --a
base which 'gradually grew
in size, yielding substantial
Over the years various
companies unsuccessfully
drilled for oil both on shore
and offshore, but it was mot
until last July that these
efforts were finally re-
warded when Buttes Gas and
Oil of California made a
promising strike beside
Sharjah?s Gulf island of Abu
Musa.
An agreement had been
reached with Iran in 1971 to
share die island and also to
share wn a fifty-fifty basis,
any oil which might be
found in a 12-mile belt
around it. Iran has agreed to
pay Sharjah #1.5m a year
until Sh-arjah'?s oil revenue
reaches #3m.
With these modest
riches-which have been
augmented to an undisclosed
amount by grants from Abu
Dhabi-it is astonishing that
Sharjah not only survives,
but to all outward appear-
ances, thrives.
The modern section of the
city shows every sign of
prosperity. The main street
is lined with fine commer-
cial buildings and multi-
storey office blocks. The ave-
nues are broad with rounda-
bouts (filled with flowers and
with central fountains. The
telephone exchange which
opened in 1967 with 100
lines now has 2,000 lines with
another 1,000 soon to be
added. There are as many as
15 banks.
The capital has a fine
modern cinema and two
first-class hotels, the Sheba
and the Sharjah Carlton.
The latter, just opened at
the seaside suburb of Al
Khan, has 170 rooms, some
luxury suites, and offers
yachting, a swimming poolCP RGHT
and sea bathing. by Tim Owen
Sharjah is fortunate that
it has an energetic and able
administrator in its Ruler
Shaikh Sultan bin Muham
mad al Qasimi. Shaikh
Sultan works very long
hours and has a habit o
dropping in, without warn
ing, on any government de
partment he feels may b
under pressure. He is the
only one of the union'
seven rulers who speak
fluent English, an advantage
for foreign businessmen.
-Davelopruent -plans -- ar -
--flow-being worked-out-wit
the help of a consultants
firm and a report should b
eady, planned progress
ithin the state's financial
apacity.
In one respect Shaikh Sul-
n's planning has already
tarted, with the expansion
f the port on which l'i' s
specially keen. In 1965,
ark began on a 2,OOUti
etty with two berths for
hips s of up to 10,000 tons,
low known as Port Khalid,
fter the last Ruler, who was
ssassinated in 1972. A f15m
reject is aiow being carried
ut to increase its capacity
o that it can take six ships
f up to 12,000 tons. The
onstruction of warehouses
nd storage facilities has
egun, and the whole project
viii take four years.
A second port so near
ubai's magnificent facility
may seem an anachronism,
but Shaikh Sultan is con-
vinced it is necessary as part
of his oil industry's infra-
structure and to cope with
the upsurge in prosperity
that an oil income will bring.
A smaller nrniect is also
beinz car-ied out in the
Creek, and the depth is
being increased to 19ft. The
British firm, Tarmac Con-
struction, started on the first
phase of a #1m scheme in
1969 to cut the sandspit
forming the outer wall of
the creek and opening up
carrying dhows to berth
alongside the waterfront
once mare.
Light industries have lag-
ged in Sharjah so far. There
is a small fish processing
plant near the capital and
now the Indian firm of
Gokaldas is entering into a
joint. venture to produce;
caustic soda and hydro-
chloric acid. Other enter-
prises may soon follow.
Shaikh Sultan is well'
aware that there are posse
bilities for the development
of agriculture in Sharjah l
which has so far seen held
up through lack of funds.
The state's enclaves on the
Gulf of Oman-known as the
Batinah Coast-have good
fertile land and adequate
water derived from the
mountain range which forms
the spine of the peninsula.
To the west of the moun.
tains there are flourishing
vases at. Adh Dhayd and
Mila-iha where there are
experimental farms.
Sharjah may well have
considerable tourist poten
tial, particularly at the little
port of Fakkaii, on the
Batinah Coast where the
mountains react the sea and
cradle a small, deep bay.
There is no hotel there yet
and this must wait until
construction of the mountain
section of the road linkilig
Sharlah's east and west
coasts is completed.
Smaller par kite
future lies 1`11
ishing and farniin:~
Of the seven emirates com- rtes.
prising the Federation of the This situation has arisen
UAE little is known or from the fact that sover-
heard of Ajman. Unim al eignty in the past has been
Qaywayn, Al Fujayrali and based on tribal allegiance.
Ras al Khaymah, the four rather than control of terri-
smallest partners in terms of tory.
population and wealth, so It is unfortunate for the
much are they overshadowed four minor partners that no
by the infinitely more pros- oil has been found in any of
perous emirates of Abu them. All fields established
Dhabi and Dubai. so far are in the three larger
In most cases the prob- emirates, Abu Dhabi, Duba.
lems arising from the sparse- and Sharjah. Exploration
-of their populations and both onshore and offshore
-continues in Ras al Kh-iy
further aggravated by frag- mail, where there are high
mentation of their -territo- hopes of success.
Approved For Release 1999/09/02 : glAIRDP79-01194A000100630001-6
 CPYRGHT
Apart from the possibility
1of the discovery .of oil the
greatest scope for the expan-
sion of the economies of the
four smaller emirates lies in
the development of fisheries
and agriculture.
For this their larger and
more prosperous partners
will be able to erode finan-
cial backing, as indeed they
are. doing in the develop-
ment of- roads and other
forms of communications, as
well as port and harboiir
facilities. It is perhaps ironic
that entry into the UAE has
eliminated two sources of
revenue for the minor emi-
rates, the issue of passports
and the sale of postage
stamps.
Ras al Khaymah, the lar-
gest and most populous of
the four, with a land area of
650 square miles and a pop-
ulation of 50,000, has the
most substantial and varied
natural resources, and it is
the only one which at
present has any significant
export trade. Its principal
resource and source of
export is agriculture, and
there is potential for con-
siderable expansion.
- Construction of Ras al
Khaymah's Union Cement
Factory is well under way.
'The plant is expected to go
into production in 1975 with
a capacity of 250,000 tons a
year. It will be the largest of
its kind in the UAE and
should do much towards
boosting exports.
Dried fish has been ex-
ported from Ras al Khaymah
for many years, and with
improved and modernized
fishing methods this trade is
capable of considerable ex-
pansion. Another minor in-
dustry is marble quarrying.
As a necessary basis for
the increased exploitation of
its resources, Ras ai Khay- I
mah has improved its public
utilities. a power station has
been built providing electric-
ity for towns and villages,
water supplies have been
laid on. the creek at Ras al
Khaymah town has been
dredged and wharfage and
port facilities constructed.
Al Fujayrah is next in
size, with a land area of 600
square miles and a popula-
tion of 10,000. Unlike the
other six emirates, Al Fujay-
rah lies entirely on the sea-
board of the Gulf of Oman.
Its territory is divided into
two main segments separ-
ated by a wedge of Sharjah
land.
A] Fujavrah was the last of
the Trucial States to be re-
cognized by Britain, and its
backwardness derives from
its isolation from the other
emirates. Communications
are its greatest problem, and
CPYRGHT
agriculture and fisheries are
the mainstays of the econ-
omy.
Development of the fisher-
ies are the main hope for
expansion although hopes
are still entertained for the
discovery of offshore oil.
The natural harbour at
Khawr Fakkan in neighbour-
ing Sharjah territory is de-
veloping into an important
fishing centre, and it is a
likely site for a fishmeal
plant in which Al Fujayrah
would have a share.
Umm al Qaywayn, with, a
land area of 600 square
ers along the Gulf coast,
Abu Diiabi is anxiously
awaiting the outcome of long
and complex negotiations be-
tween the international oil
companies and the Govern-
ments of Kuwait and Saudi
Arabia over the host gov-
ernment's participation in
the companies' valuable
concessions in those coun-
tries.
The Abu Dhabi Govern-
ment has opened prelim-
inary talks with the two big
producers on its territory,
the Abu Dhabi Petroleum
Company (ADPC) and A?bu
Dhabi - Marine Areas
(ADM,A). But it is thought
that little progress has been
made and meetings between
the two sides have merely
been to keep in touch with
developments in - Saudi
Arabia and Kuwait.
Uncertainty also arises
from the-Abu Dhabi Govern-
ment's militant stand over
the use of the oil.- weapon
against Israel's supporters.
While other Gulf states have.
been preparing to restore
production - to the levels
before the - output restric-
tions were imposed last
October, Abu Dhabi has
shown a marked reluctance
to give the operating com-
panies permission to get back
to normal. - -
Serious doubts have arisen
over whether the Govern-
ment will allow the long-
term production plans of the
ADPC and ADMA to go
ahead as planned or will
instead impose its own, less
generous, production sched-
ules.
The future course of the
Abu Dhabi oil industry is of
miles and a population of
5,000, lies entirely on the
Persian Gulf. The only
centre of population is Umm
al Qaywayn town at the head
of a shallow creek. It is
entirely a desert region, and
the only foreseeable outlet is
its fisheries, apart from the
possibility of offshore oil.
It now has good road com-
munications with the rest of
the UAE, and a power sta-
tion has been built. Plans
exist for developing Umm al
Qaywayn as the centre of an
industrial fishing project for
the UAE as a whole.
its 21,500 million barrels of
output to be dramatically
increased. In addition, Abu
Dhabi's oil is of high quality
with a low sulphur content
that makes it particularly
attractive to Japanese com-
panies facing growing de-
mands from environmental-
ists to reduce the sulphur
content of atmospheric emis-
sions by industrial oil con-
sumers. - -
In 1964 - Abu Dhabi's
output was just over . nine
million tons a year. By 1970
it had risen to more than 33
million tons a year while last
year, despite the production
cuts, it was about" 62,300,000
tons. -
Before the outbreak of the
war between Israel and the
Arabs last October, produc-
tion in Abu Dhabi was run-
ning at an average of
5,300,000 tons a month. Had.
there been no interruption in
production this rate would
have Provided an annual
total of more than 64 million
tons. - - -
. The companies, faced with
an ever expanding demand
for crude, had planned to
increase output to three mil-
lion barrels a day by 1978
and five million barrels a
day by 1980. It now seems
unlikely that-'these--targets
will be reached on the time
schedule envisaged by the
companies and there is a
good chance that production
will never be allowed to
attain these high levels.
-
Goverriment's-new
attitude
The -most significant indi-
Finally there is Ajman,
smallest - of the AE emi-
rates with a land area of 300
square' miles and a popula-
tion of 5,000. Eve with this
small area its territory is
fragmented-the ajor por-
tion is an enclave on the
Persian Gulf oast sur-
rounded by Sharja land.
Ajman is entirely barren,
except for a sma 1 segment
near the foothil s of the
Hajar mountains. Its only
productive occu ation is
fishing, in which t can use-
fully contribute to the indus-
trial fishery p 'oject in
neighbouring Um a] Oa;
cation of the chl-ng_d atii-
during a -recent sit to Abu
Dhabi by Mr Geo fi-ev Stock-
The Ruler. Sha kh Za cd,
told Mr Stockwel that pro.
duction cuts woul be lifted
but output would not rise to
a level above the national
interests of the country. This
is very much -in lie with the
attitude to oil that emerged
during the supply crisis. Abu
Dhabi was the fi st state to
impose an embargo on deliv-
eries to the United States
and has taken a hard line in
the counsels of the Organiza-
tion of Arab Petroleum Ex-
porting Countries (OAPEC)
on the restoration Hof produc-
tion levels.
While it may take several
months for the Si uation re-
garding future roduction
levels to become clear, it
will also be -- -s me- - time
before the question of state
participation is settled. -The
two matters - are li ked since
the Government will find it
difficult to prop unce on
production levels until it
knows the size of its share-
holding in the production
companies. - . -
Under the tern s of the
participation' pact agreed in
1973, --the------. G vernment
acquired a--25 per cent stake
-
in both compani s which
would have risen . o .51 per
cent in stages by 1982. The
government stake in Abu
Dhabi Petroleu was
acquired at the expense of
Shell, British Petroleum.
Compagnie Francaise des
Petroles, the Near East De-
velopment Corporation (a
joint subsidiary o - Exxon/
Mobil) which held 23.75 per
ppiuved or a ease
 CPYRGHT Approved For Release 1999/09/02 : CIA-RDP79-01194A000100630001-6
cent of the company each in the ground-the terms of
with the remaining 5 per the settlement with BP.
cent held by the Gulbenkian just how badly the
interests. Japanese are affected will
The situation in Abu depend on the negotiations
Dhabi Marine Areas is more now in progress in Kuwait
complex. For many years the and Saudi Arabia. Kuwait
company was two thirds upset the original garticipa-
owned by. British. Petroleum tion schedule when its
and one third. by. CFP and -National Assembly refused
produced oil from the off- to ratify the agreement that
shore Zakum field that was ;gave the Government a 25
piped to loading and storage tper cent stake..
facilities on Das Island. But New talks began with Brit-
BP, partly because of a need ish Petroleum and Gulf, the
to raise large amounts of joint owners of the Kuwait
capital to finance develop- Oil Company on revised
ments in other parts of the terms. All the other Gulf
world, decided to sell off States, including Abu Dhabi.
some of its excess crude oil at this point told the oil
capacity in the Middle East. companies that they re.
Abu Dhabi Marine Areas served the right to renegoti-
was chosen as the vehicle ate their own participation
for this partial divestment agreements in the light of
and in 1972 talks began with any revised terms acquired
b
Deminex, the German over- by the Kuwaitis.
seas oil exploration consor- After nearly a year BP,
tium. At the time, the Ger- Gulf and the Kuwait Govern-
mans were anxious to merit drew up an outline
acquire their own sources of agreement that gave the
crude oil and lessen the Kuwait National Oil com-
country's dependence on the pany a 60 per cent share in
foreign oil groups for its KOC with the right to revise
vital supplies. But after the agreement by 1979. But
lengthy negotiations the deal these terms have already
was shelved mainly because come under fire from meni-
of the lack of financial sup- bers of the National Assem-
port. from the West German bly and there continues to
Government and also be- be a demand for 100 per
cause of resistance to the cent takeover of the produc-
acquisition, by Veba Chemie,s tion facilities.
one of the members of the The situation in Saudi
consortium. Arabia is far less clear since
It was not difficult for BP the talks betweet
to find a replacement e Aramco consortium and,
bidder. A consortium of the Government have been
conducted in secret. How-
Japanese companies grouped ever, it is thought that the
together to form the Over- Saudis have suggested an
seas Petroleum Corporation Iranian type solution to the
and bought a 45 per cent problem--the Saudis would
interest in BP's two-thirds take over the entire conces-
holding. The final stages of sion areas held by the
the negotiations coincided Americans in return for a
with the first round of parti- long term probabIy 20
cipation talks in which the year-supply contract.
Abu Dhabi National Oil There is a growing feeling
Company acquired a 25 per that this will be the best way
cent holding in the conces- out of the confused partici-
sion, pation situation, particularly
From January 1, 1973, the since this formula has
shareholdings in ADMA worked so well in Iran. Abu
have been BP 27.5 per cent ; Dhabi could then find itself
CFP 25 per cent ; Abu Dhabi completely in control of its
National Oil Company 25 per own oil, and offering the
cent ; and Overseas Petro- international companies sup-
leum Corporation 22.5 per plies under long-term con-
cent. .. tracts.
The Japanese paid #320m Even the conclusion of an
for their stake in ADMA and agreement for a 60 per cent
in the light of subsequent stake would make the coun-
developments this has try considerably richer. The
proved to be an expensive recent agreement between
deal. Production has not ' Qatar and Shell Qatar and
moved forward as quickly as Qatar Petroleum confirmed
Ole Japanese had hoped and that 93- per cent of the
they are now faced with the posted price is the most
prospect of the Abu Dhabi likely level at which the oil
Government increasing its companies will buy back the
stake in the company to a oil acquired by the govern-
Minimum-of 60 per-cent and meats as a result of partici-
-payiwg- contppensativn_on-tire pation Ta Abu -Dhabi this
basis of the updated book would add between $2 and
values of the assets rather $3 to the value of each
than on the value of the oil barrel bought from the Gov-
Approved For Release 1999/09/02 :
YRGHT
rnment. A lump sum pay-
ent would have to be made
o cover all participation oil
ifted since January at the
Id buying back rate-a sum
hat could run into hundreds
f millions of dollars.
Whatever happens Abu
habi can be assured of a
ontinuing market for any
mounts of oil it can pro-
uce mainly because of the
-ow - sulphur content. The
quality of the oil is reflected
Ti present posted prices,
inilaterally fixed by Abu
halii after the October
eeting of the Organization
f . Petroleum Exporting
?ountries that revolutionized
he world pricing system.
Abu Dhabi had for many
ears considered that its sup-
lies were underpriced and
ven before the. October
meeting had been pressuriz-
ing the oil companies for the
introduction of a sulphur
premium. In terms of gov-
ernment receipts, in cents
per barrel, up to 1972, reve-
nues from oil were among
the lowest in the Gulf.
Posted prices fixed from
January 1 make Abu Dhabi
oil among the most expen-
sive in the area.
Oil from the Umm Shaif
field (37 to 37.09 degrees
API gravity) shipped from
Das Island commands a
posted price of $12.086 a
barrel. The higher quality
Murban crude (39 to 39.09
degrees API) shipped
through Jebel Dhanna has a
posted price of $12.636 a
barrel and Zakum crude
from 'Das Island (40 to 40.09
degrees API) is fixed at
$12.565 a barrel.
Valuable spin-offs for
atecomer in oil stakes
southern coast of the Gulf
For oil men the state of Dubai
emains a haven of calm in
the Gulf, free at present from
he complex and seemingly
never-ending negotiations
over government participa-
ion in the companies' con-
essions. Visiting company
executives from other parts
of the Gulf are often sur- business
to find that the main
bject in the oil life of Dubai
s to exploit existing dis-
overies and continue the
earch for new reserves,
Compared with its neigh-
ours in the Gulf, Dubai is a
ewcomer to the oil-pro-
ucing business and its ex-
horts are well below those of
he more established pro- h
ucers. But the state's long
history as a trading area is
Petroleum Company
in which Continental Oi
roducing valuable results in e shar
(Conoco) holds a 30 per cen
the operator
ction and trading oper
produation S.
While there has been no
official move by Dubai to
copy the participation de
mands made by its neigh
ours, many people in the
oil industry think that a
state shareholding will come
once this delicate question
has been finally settled in
i surrounding oil produc-
ing states. Nobody believes
Dubai will be able to
o
Z~l
,
l
t
,
,
-
-
 CPYRGHT
of the other Gulf states.
The greatest of these pres-
sures could come from
within the United Arab Emi-
rates itself. Dubai is not a
member of the Organization
of Petroleum Exporting
Countries (OPEC) but re-
cently Abu Dhabi transferred
.its membership to cover the
whole of the UAE. Abu
Dhabi is committed to a
policy of participation in the
concessions of the major
producing companies. This
comes at a time when there
has been a quickening in the
pace of the gradual moves: to
coordinate oil operations
throughout the UAE.
Although Dubai was not a
member of OPEC it gained
the full benefits from the
decision of the major pro-
ducers to set prices unilat-
erally. Posted prices for
output from the Fateh field
have now risen to more than
$11 a barrel.
High hopes of
cash flow
Dubai, like all the Gulf
shaikhdoms during the late
1950s and early 1960s, had
high hopes of striking a real
cash flow from oil. As
Kuwait, Abu Dhabi and
Qatar began to grow rich on
oil, exploration in other
parts of the Gulf proved less
successful. Intensive explora-
tion work onshore in Dubai
failed to uncover a commer-
cial field. At this stage
Dubai Petroleum :hook on an
offshore concession covering
the whole of the waters
under Dubai's control.
Conoco, operating on
behalf of Dubai Marine
Areas (jointly owned by
Compagnie Francaise des
Petroles and Hispanoil, the
Spanish oil group, and hold-
ing 50 per cent of equity),
Delfeze Dubai Petroleum, a
subsidiary of the West
German Wintershall Co (5
per cent), Dubai Sun Oil (5
per cent), and Deutsche
Texaco (If) per cent) hit the
Fateh field in 196G.
A decision was taken not
to construct a pipeline to the
shore where a conventional
tanker loading terminal and
storage facilities could be
built. Continental decided to
go ahead with the first
really large-scale offshore
direct loading system, to
take advantage of the deep
water in which the oil had
been discovered. Tanker
loading buoys were installed
close to the producing plal-
forms and oil pumped
directly into the tankers.
Offshore loadine tcrh-
niques are well developed
but if the field is to
maintain a regular rate of
production considerable
storage- is necessary so
that oil can continue to flow
when the weather prevents
the tankers from coupling to
the loading buoy. While the
field was in the initial stages
of development and volumes
were only about 100,000 bar-
rels a day an old tanker was
converted to act as a floating
storage unit. But if produc-
tion was to be raised to the
hoped for 450,000 barrels a
day a different method of
storage was needed.
A completely new type of
offshore storage unit was
designed and built by the
Chicago Bridge Co. Three
steel tanks were built in the
shape of inverted champagne
glasses and each capable of
holding 500,000 barrels of
oil. The tanks, known locally
as the khazzans, sit on the
sea bed with the neck of the
"glass " protruding through
the water and having a
production deck on top. As
oil is pumped into the tank
sea water is forced out
through vents in the bottom.
The oil and water do not
mix and the system, despite
some' earlier doubts on the
part of envir6nmentalists,
has not proved a pollution
hazard.
There
the size
is no limitation on
oftanker that can
use the facilities at Fateh.
Many large tankers from
other parts of the Gulf,
unable to take on a full load
because of the water depth
at other terminals, fill up
their tanks in Dubai on their
way out of the Gulf. lfow.
ever, the bulk of the oil is
lifted directly by the mem-
bers of the consortium.
Production was seriously
affected last October when
there was a major fire
on one of the production
platforms. Two wells were
completely destroyed and
another had to be shut down
for safety reasons. Replace-
ment wells are being. drilled.
but production is still below
the 100,000 barrels output
before the fire.
Better output
expected
working at full capacity.
Dubai Petroleum, under
the terms of its concession,
has relinquished about 25
per cent of the offshore
area. So far there has been
no at-tempt by the Dubai
Government to reallocate
this.
A new field has been
located by Dubai Petroleum
about .15 miles south-west of
the Fateh field. It was found.
during a wildcat drilling pro-
gramme in October 1973, but
work on platting the exact
size of the discovery has
been hampered by the acute
shortage of offshore drilling
rigs in the Gulf. With off-
shore areas in other parts of
the world making considera-
ble demands on the available
drilling equipment, there is
a waiting list of about 18
months for the rigs that are
operating in the Gulf.
Dubai Petroleum has
named the new find the
Delta prospect, and has
hopes that it will prove to be
a commercial find worth
linking into the Fateh
production network. The size
of Duhai's known reserves
could also be expanded as
the result of an intensive
seismic -survey of the entire
offshore area by Dubai
Petroleum. Seismic tech-
niques have improved con-
siderably since the last
survey and thereare high
hopes that new prospects
will emerge.
Sharjah is the latest of the
emirates to become an oil
producer. A group led by
Buttes Oil and Gas of the
United States found oil off
the island of Abu Musa,
owned jointly by Sharjah
and Iran. Exports began
early this year and are
scheduled to reach 200;000
barrels a day by the end of.
the year. Oil is being loaded
directly into tankers and a
barge capable of storing
580,000 barrels of oil - has
been floated in. There are
plans to build a permanent
production and storage com-
plex on Abu Musa.
Legal action against
buyers of oil from the Abu
Musa find has -been threat-
ened by Occidental Petro-
- -irta-dditlairto drflliTn cess u y disputing t e production wells, wells, Dubai ership of the concession.
Petroleum has installed ..a Occidental holds concessions
six-pile platform on the field off Umm al Qaywayn and
Ajman. In Ras al 1(6ymah
to house facilities to inject the Vital group of Holland
340,000 barrels of water into has started an exploration
the structure each day. A programme after successful
substantial improvement in' prospecting efforts by Shell
output is expected once the and Union Oil.
water injection facilities are - R.V.
Approved For Release 1999/09/02 : CIA-RDP79-01194A000100630001-6