Oil and Energy Industry in UAE Essay Example | Topics and Well Written Essays - 1750 words

Oil and Energy Industry in UAE - Essay Examplem.) one by one and hence worlds fifth and fourth largest respectively (Khalil 2009). UAE is OPECs third largest oil producer and currently pumps 2.4 million b/d (Khalil). UAE projects to enhance upstream as thoroughly as downstream product capacities (Energy Information Administration 2007).Historically, oil, and recently natural gas, has contri unlessed vitally to UAEs overall economic development and suppuration (UAE Federal e-Government Portal 2006). Currently, zip fastener sector, especially oil and gas, contributes as much as 62% to UAEs overall economy (UAE Federal e-Government Portal). Essentially, Abu Dhabi holds sway over UAEs oil capacity both in overall production capabilities and proven reserves (9.2 billion barrels) (EIA). Moreover, Abu Dhabi National Oil Company (ADNOC), UAEs largest state-owned company, dominates production (EIA) and controls UAEs quota prescribed by OPEC (EIA).Notwithstanding plans to diversify econo my (Abu Dhabi sparing Vision 2030 n.d.), UAE continues to rely on oil and gas as major sources for state revenues (Non-Oil Sectors Ac... This, in fact, poses serious challenges for an economy whose performance has depended largely on international oil markets (Husain, Tazhibayeva, and Ter-Martirosyan 2008). Moreover, not only has economic performance in an oil-rich country such as UAE depended on energy sectors positive or negative shocks but fiscal policies seem to strongly correlate with oil prices as well and hence impact positively or negatively, depending on fluctuations in oil prices, non-oil production sectors (see fig. 1).Insert Your Last Name 3Fig. 1. Husain, Tazhibayeva, and Ter-MartirosyanIndeed, a growing body of analyses and government reports (Boer & Turner Abu Dhabi Economic Vision 2030 ) bear repeatedly stressed significance of and implications for economic variegation in Gulf Council Countries (GCC), of which UAE is a member. The case for diversification in UAE i s even more pressing given UAEs reliance on Abu Dhabi and Dubai as leading engines for countrys economic growth (OSullivan 2007). Further, given each emirates autonomous status according to constitution (OSullivan), UAE cannot enact a universal and binding economic policy unless political potency steps in. This is, again, particularly true given Abu Dhabis and Dubais attraction force as opposed to remaining emirates fading allure, especially to youth.So far, Abu Dhabi and Dubai, UAEs leading economies, both have managed to maintain healthy economic growth rates according to each emirates strategic vision. Insert Your Last Name 4However, overall, UAEs leading economic sector, i.e. energy and oil, seems to project growth in oil production capacity (see fig. 2) and increasing foreign