x Abu Dhabi, UAEMonday 24 July 2017

Energy sector is more than just oil production

The UAE is uniquely well-placed to become a true regional hub for the fast-changing oil-and-gas and oilfield-service industries.

As more foreign companies enter the UAE's oil and gas fields, a new prospect is coming into view: the country is positioned to become a true regional hub for the energy industry.

As more areas are opened to exploration, and as existing concessions come up for renewal, a number of new companies are moving into the business. Companies from Germany, Austria, South Korea and China have all recently signed deals. Some of the new entrants are operating, or plan to operate, elsewhere in the region. They will need regional headquarters.

With an already developed oil and gas industry, ample reserves, stable government, a relatively open economy, superior travel and shipping infrastructure, and an excellent reputation, the UAE is the obvious location for those offices. With them would come oilfield-services companies that are essential to the industry.

As The National reported last week, James McCallum, the chief executive of Senergy, a service company for the industry, mentioned this possibility recently, saying: "On the back of [new entrants] one can anchor a long term, sustainable supply chain."

To be sure, Mr McCallum's company would have much to gain from this. But so would the whole country, which could broaden this sector of economy that depends on highly skilled, remunerative jobs.

Europe's deal to prop up the euro resulted in Friday's jump in oil prices (Brent crude gained 7 per cent to more than $95 a barrel, the largest one-day surge in three years), reminding us that the price per barrel is the pulse rate of the world economy. But selling oil is not the only way to make money from it.

Around the world, countries rich in raw materials endeavour to build up their capacity to add value by processing, to escape the trap of being merely "hewers of wood and drawers of water". For oil producers, adding value points to refining and petrochemicals, industries already well developed and growing in the UAE.

But this new goal being suggested goes beyond simple downstream processing. Becoming a true regional hub promises dividends for the whole country: Dubai is already a hub for financial services and transport. Fujairah has a port - now under high-priority development - on the Gulf of Oman, and a floating liquefied natural gas terminal is planned there. Several emirates have refineries.

The UAE has the prospect of rewarding new jobs for managers, engineers, technicians, refinery hands and more. Doors are opening for young people from every part of the country.