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Tuesday 20 February ,2018

The Petroleum Gulf The Discovery and Development of Offshore Oil in the United Arab Emirates

The Latest of the NA Publications

The Petroleum Gulf

The Discovery and Development of Offshore Oil in the

United Arab Emirates

The book “The Petroleum Gulf” - published by the National Archives of the United Arab Emirates in Arabic and English – gives an account of the details of the discovery and development of offshore oil fields in the UAE. It monitors the emergence of the oil industry in the maritime areas since its early beginnings up to its modern operations and the human stories at its core. The book points out that oil has come at the exact time in the Trucial Coast; it brought a new wealth that replaced the ancient pearl wealth and had exceeded all expectations.

The book also tells the story of the people, the politics behind the first offshore oil discovery, its development, its impact on the country's relations with its neighbors, and monitors the recent oil discoveries in the Arabian Gulf, which form a key chapter in the modern history of the United Arab Emirates; as it started to have modern cities and became a hub for regional trade, thanks to the oil wealth. The book indicates that many books gave accounts of oil histories that tend to deal with the offshore exploration in a few paragraphs, and focus on the onshore oil discoveries instead. Remarkably, the industry took to the open sea in less than a century ago; this fascinating book (with 282 pages) has much to tell about the transformation of the UAE from a traditional society into a modern, prosperous state.

The book indicates that the Arabian Gulf encompasses 55% to 68% of the world’s oil reserves and more than 40% of the gas reserves. However, the Arabian Gulf has its own mysteries; the British authorities saw that the end of World War I, was not promising in terms of oil. All evidences indicated the existence of a “floating pitch at sea” and with the belief that searching for oil is no more than gambling, the interest of some companies in the geology of the Arabian Gulf had increased.

The book shows that geologists have visited the Gulf islands one by one, collected samples from them, and examined the rock samples; they found that the black color of the shelves in some islands was caused by the sea rather than the oil deposits.

Negotiations took place in the Trucial Coast to obtain oil concessions for long periods. When drilling began, the search for water was the top priority for the then Ruler of Abu Dhabi, Sheikh Shakhbut. Oil surveys began only in 1936 when geologists made one visit to Sir Bani Yas Island.

The discovery of oil was delayed, and in the mid-1930s, as there was a huge oil reserve in elsewhere in the Middle East. Oil supply in the market increased considerably and that slowed down its industry in the whole world. Thus, the decline in oil prices and the meager financial incentives to the companies delayed the opening of new areas for exploration, and larger companies sought to strengthen, their status while the smaller ones failed to do so.

In May 1940, a new and strong evidence of the huge oil wealth in the Arabian Gulf - emerged. Iraq Petroleum Company and its subsidiary companies were leading the western oil ambitions in the region. After the lengthy negotiations, agreements were concluded for the exploration concessions. Sheikh Saeed, Ruler of Dubai, was the first to sign an agreement on May 22, 1937, which granted the company a 75-year concession. On January 3, 1939, Abu Dhabi signed a new 75-year agreement.

The offshore explorations followed the onshore oil discoveries, and oil prospectors were guided by features such as seepages, anticlines and salt domes. They were armed with no more than a hammer and a pair of strong boots. Marine operations could cost five times as much as those on land.

The book reviews the history of offshore oil exploration and its methods, equipment and costs, and stressed that the year 1947 often seen as the starting point of the modern era of offshore oil exploration, is significant for another reason. The book describes the status of the islands in the Arabian Gulf States, and they were neglected. Then the book shows how they received attention and how each emirate attempted to establish its rights to its islands. The book also enumerates the disputes over the ownership of the islands and the maritime boundaries. In this regard, the book mentions that when Saudi Arabia declared its sovereignty over the seabed, the field was open for Aramco for offshore oil exploration as per its concession. The oilmen discovered “Safaniya” field, the largest offshore oil reservoir. In 1962, the field produced 350000 barrels a day. This field remains the second largest field in the world.

 In the 1950s, a company's geologists visited Abu Dhabi and found it rather more jaded and less populated than before as the result of Great Depression and the impact of cultured Japanese pearls that had hit the sheikhdom hard. Pearl diving trips were launched from Abu Dhabi during the diving seasons.

The survey was conducted under the waters of the Gulf, and “BP” filmed it in a documentary film with the title: “Station 307”. The film shows the suffering of the surveyors because of fear of sharks, sea snakes, and sawfish in the waters of the Gulf, and how they obtained the samples of rocks by hammers and nails. The diving crew and surveyors described their journey in the Gulf waters as having a special attraction that makes people lose their sense of time. The survey resulted in the selection of a site to dig a test well.

The book contains illustrations and photographs of the ship that brought the surveyors and some of its crewmembers, the anti-shark cage, the rock samples extracted from the bottom of the Gulf, some geographical maps and some plans of the discovered oil fields. The book has an appendix that gives information on the abbreviations, real names and dates of establishment of the local and international companies working in the oil industry.

ADMA had many discoveries on Das Island, and its representative was based in Abu Dhabi. Following the discovery Sheikh Shakhbut visited it. In 1960, the company established a new center in Abu Dhabi for training on the oil industry. At that time Abu Dhabi was about to witness a tremendous transformation. In 1977, Abu Dhabi established Abu Dhabi Marine Operating Company (ADMA-OPCO) to take over the responsibility of operation in the marine oil fields and ZADCO to develop Zakum field. Then Abu Dhabi National Oil Company (ADNOC) was established.

As oil discovery was lagging behind in its coast, Dubai had relied on its port and the entrepôt trade. The companies persisted in their survey until they provided Sheikh Rashid with the good news of Fateh field, 110 kilometers from the shore.

The challenges have increased with the transfer of oil exploration and extraction to the deep sea. This change led to a number of challenges, such as providing information on the topography of the seabed, water depth, sea state, weather conditions, political conditions and legal issues such as boundaries, regulations, customs, traditions and trends. Prior to obtaining offshore exploration and extraction concessions, the capital required for investment in this area remains essential; because the cost of this industry was high.

A rising demand for oil after the end of World War II stimulated a search for new sources of crude across the world that formed pressure on the oil companies.

The book confirms at its epilogue that Sheikh Shakhbut had doubts in the Western oilmen. He focused on water and on oil as well. He was intelligent. He was well informed – he liked to listen to the wireless and received news via the grapevine about developments elsewhere in the Gulf. He was committed to Bedouin tradition, which made his words binding. Therefore, confidence was simply the essence of everything.

It is noteworthy that the takeoff of offshore oil industry with other developments had led to the establishment of the United Arab Emirates; the Rulers of the Trucial Coast began to meet in the Trucial States Council, which was the forum for discussion.

The withdrawal of British forces created a vacuum in the region. Therefore, it was imperative on the Gulf States to unify their forces in the Gulf Cooperation Council (GCC), where they can coordinate their economic and defense policies and prepare their budget to reduce their dependence on oil. As oil currently forms the core of the UAE's economic power, and as increasing its production is one of its objectives, UAE formed its Economic Vision 2030, which serves as a road map for Abu Dhabi's economic development process over the coming years.

The discovery and development of marine oil in the Arabian Gulf - especially in the UAE - remains a fascinating story; it contains the largest offshore oilfields, among them are “Safaniya” field, the upper “Zakum” field and “Manifa” field.

The book has eight chapters, fully illustrated with photographs, drawings, maps and appendixes, terms and references, introduction, and an epilogue.