A cornerstone of the U.S.’s strategy to counter the growing influence of China and Russia across the Middle East via Iran remains the relationship normalisation deal signed between Israel and the UAE. Not only does this provide the U.S. with some element of control over more of the oil coming from the region, to augment that principally of Saudi Arabia, but also as the oil industry in particular involves the movement of huge amounts of money, ships, equipment, technology and personnel in often disguised ways it allows for increased intelligence-gathering and counter-terrorism activities by the U.S. and its allies.

The UAE is particularly useful in all of these endeavours, as has been analysed in depth in my new book on the global oil markets, given its scope to increase crude oil output from Abu Dhabi and to offer a secure storage and bunkering area in Fujairah, outside the perennially politically-sensitive Strait of Hormuz. Last week saw another of the UAE’s constituent emirates, Sharjah, announce proposals to launch an offshore bidding round for its new gas and condensate find. The bidding, which is officially mooted to start in early 2023 but which may occur later in 2022, according to legal sources in Abu Dhabi spoken to by OilPrice.com, relates to Sharjah’s Block B, run jointly by Italy’s ENI and the state-owned Sharjah National Oil Corp (SNOC) after the Emirate’s first bidding round in 2019. Late in 2020, the two companies discovered the Mahani reservoir, and subsequent first drilling yielded up to 1.4 million cubic metres per day (mcm/d) of lean gas and associated condensate.

1st gas was also produced this year from the Mahani-1 gas well, but no volume data was released by the companies, although SNOC did state that it is continuing to limit production from Mahani-1 at less than 1.4 mcm/d in order to collect data and map out the full potential of the reservoir. Further drilling by the two companies, which also work together in onshore concession areas A and C, is set to continue in January with two new wells, according to the statement by SNOC, and the company added that the initial seismic data on the developments show ‘significant’ reserves that will be ‘very economical’ to produce and develop.

These plans to develop Sharjah’s gas output potential are part of an overall initiative across the UAE to boost its gas production and develop potential sites, particularly in light of the huge gas discovery made in 2020 in Jebel Ali. According to statements from the companies developing the site – the Abu Dhabi National oil Company (ADNOC), and the Dubai Supply Authority (DSA) - the shallow gas field holds around 2.2 trillion cubic metres (80 trillion cubic feet) of gas across a 5,000 sq.kilometre area between Abu Dhabi and Dubai. Becoming self-sufficient in gas is a goal of the UAE, as part of its broader ‘Operation 300 Billion’ plan that intends to raise the contribution of the country’s industrial sector to AED300 billion (US$81 billion) from the current AED133 billion within the next 10 years.

This objective – itself part of the UAE’s Circular Economy Policy 2021-2031 - will be achieved in large part through the creation of 13,500 industrial companies over that period, covering the manufacturing, construction, electricity, gas, mining and quarrying sectors in the first instance. Self-sufficiency in gas will also allow the UAE to build out a strategic petrochemicals sector and to avoid being reliant on Qatar for the gas that it requires for its electricity grid.