UAE earns oil revenues of over $ 300 bn in 40 years

Nov 16, 2003 01:00 AM

The UAE has extracted over $ 300 bn worth of oil from beneath its arid desert since crude gushed out of its wells and it began exporting the black gold nearly 40 years ago. The staggering revenues were calculated on the basis of a cumulative production of more than 21 bn barrels and an average oil price of around $ 14.50 a barrel in nominal terms since the country started commercial crude supplies in 1962.
Figures by the Ministry of Planning showed the UAE produced just 14,200 bpd in 1962, after which output began its rapid climb to surpass 2 mm bpd in some years. By the end of last year, cumulative production reached 21.25 bn barrels and the figure is set to exceed 22 bn barrels at the end of this year.

Oil prices were calculated on a yearly basis as provided by OPEC between 1970 and last year and by the Ministry of Planning during the 1960s. At an average oil price of $ 14.50 a barrel in nominal terms, the UAE has earned nearly $ 308 bn from crude exports between 1962 and last year.
The earnings are more than four times the country's gross domestic product of around $ 71 bn last year and nearly 43 % of the total Arab GDP. Theoretically, the UAE's proven oil reserves should have sharply declined because of such a massive production. But actually, the extractable reserves have shot up from less than 35 bn barrels in the early 1980s to nearly 98 bn barrels at the end of last year.

"This is because of the ongoing exploration and development programmes carried out by the UAE and the introduction of advanced drilling and extraction technology," said an oil industry source.
"We are talking about the recoverable oil reserves or, in other words, those in place... But I think there is far more oil in deep layers than is believed."

In 1962, the UAE earned just around $ 10 mm in real terms and the figure shot up to more than $ 565 mm. In 1980, its nominal oil income skyrocketed to nearly $ 17.6 bn when crude prices leapt to $ 28.6 and the UAE's output peaked at 1.7 mm.
In 2000, when oil prices were also as high as $ 27 and the UAE's production exceeded 2 mm bpd, the income was above $ 20 bn. It receded to around $ 16.6 bn last year and is projected to rebound to nearly $ 21.8 bn this year. Depending on future oil price trends, the UAE could earn more from oil sales as its crude production will likely exceed 3 mm bpd in the long-term when many other supply sources outside the Middle East will have dwindled or depleted.

Source: Gulf News
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