Economics

What Are The Major Natural Resources Of The United Arab Emirates?

Petroleum and natural gas reserves are the biggest natural resources of the UAE.

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The United Arab Emirates is a Western Asian country situated at the southern end of the Arabian Peninsula. It is bordered by Oman and Saudi Arabia and shares a maritime border with Iran and Qatar. Abu Dhabi is the largest emirate, accounting for 87% of UAE’s total land area while Ajman is the smallest, covering only 259 square kilometers. As of 2013, the country has a population of approximately 9.2 million people of which the majority (7.8 million) are expatriates. The United Arabs Emirates has the second-largest economy in the Middle East after Saudi Arabia with a GDP totaling US$ 403 billion. Although the Emirates has one of the most diversified economies in the GCC, its economy is highly dependent on petroleum and natural gas which are its two primary natural resources. Over 90% of these natural resources come from Abu Dhabi. Approximately 85% of the economy of the UAE is based on oil export. The country also has freshwater resources. However, freshwater resources are extremely limited and have been exploited over the years. The Emirates is also increasing generating solar energy as an alternative to fossil fuel and hydropower. In addition to oil, natural gas, and solar resources, the UAE has deposits of sand and rocks which are mainly used for construction. Limestone, Marl, sand, and gypsum are used in the manufacturing of cement.

Major Natural Resources

Petroleum (Oil)

Compared to the global average, the UAE has a considerable amount of energy reserves. It is the 7th largest crude oil producer in the world and the 4th largest producer of petroleum liquid in the OPEC. According to the Government of the United Arabs Emirates, there are approximately 99 billion barrels of oil reserves in the country, almost as big as what Kuwait claims to have. Of the Emirates, Abu Dhabi has the highest reserve at 92 billion barrels or 90% of the total reserves while Dubai has only 4 billion barrels and Sharjah has 1.5 billion barrels. The country produces 2.9 million barrels of crude oil per day but has an intention of increasing the production to 5 million barrels per day by 2020, which it aims to maintain until 2027. Since proven reserves are estimated to remain relatively constant, increased production will mainly rely on enhanced oil recovery practices. The Emirates’ reserve-to-production is estimated to be about 18 years.

The petroleum related policies in the Abu Dhabi are established by the Supreme Petroleum Council. SPC is one of the key players in the UAE’s oil industry and the wider economy. Other players include the Abu Dhabi National Oil Company. The country has an advanced domestic pipeline network linking producing oil fields with the processing plants and export terminals. The 230-mile Abu Dhabi Crude Oil Pipeline links the rich oil fields in Habshan to Fujairah.

Natural Gas

The UAE is an important country with regard to natural gas due to the large proven reserves and consumption. It has a substantial 6 trillion cubic meters of proven natural gas, with Abu Dhabi again holding the largest reserve (94%) with Sharjah holding 4% while Dubai and Ras al-Khaimah holding 1.5% and 0.5% respectively. This level of natural gas reserve gave the country the 4th largest in the Middle East and the 7th largest in the world. The production of natural gas has been growing over the recent years and the country currently produce 4.6 billion cubic feet per day, making it the 17th largest producer in the world. The UAE has the potential to produce even more gas, but the production is generally low because the majority of its natural gas contain high sulfur. The high sulfur makes the development and processing of natural gas technically difficult and economically challenging.

The Emirates is also a significant consumer of natural gas. In 2014, the country consumed about 69 billion cubic meters of natural gas, making them the world’s 9th largest natural gas consumer. It is the country’s primary source of energy, accounting for 60% of the UAE’s primary energy consumption. Natural gas is also used in the generation of electricity and desalination of water. Even with the massive reserves, the UAE still import natural gas to meet the demand. It is a major importer of pipeline natural gas.

Arable Land

Given that the country experiences mainly the desert climate, the arable land is estimated to be approximately 1% of the total land area. The total area under permanent crop is 2.4% of the total land area, most of which is artificially irrigated. The UAE has been working on increasing the size of land under agriculture, with research on fertilization and soil fertility technologies. Approximately 16% of the population live in rural areas and depend mainly on agriculture. The fertile agricultural land is common around the oases and seasonal river banks. Despite the aridity, the Emirates has developed thriving agriculture leading to self-sufficiency in certain vegetable crops. The UAE has approximately 40 million date palm trees, the highest concentration of palm trees in the world. Meat and dairy industries are also growing in the country.

Solar Energy

The UAE is one of the countries with the highest sun exposure rates in the world, making it a potential place for renewable energy. The government is taking advantage of sun exposure and the potential for renewable energy to establish a clean energy strategy. By 2050, the country hopes to have a balance between energy production and consumption, with solar energy playing a key role in achieving this. The energy equation targeted by then is as follows; 44% renewable energy, 38% gas, 13% coal, and 6% nuclear.

UAE's Land Boundaries

Its land border with Qatar in the region of Khawr al Udayd is a source of ongoing dispute between the two countries. In fact, the two countries dispute whether they share a land border. The UAE covers a total area of approximately 83,600 square kilometers. However, the exact total area is not known since it also lays claim to other islands in the Persian Gulf. Also, there is no demarcation between the UAE’s land boundaries with other countries, especially Saudi Arabia.

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