Business | Economy
Declining oil revenue not likely to dent Dubai growth
A decline in Dubai's oil revenue is unlikely to dent economic growth. In fact, the emirate is powering ahead with limited hydrocarbon resources, said a latest report by the Oxford Business Group (OBG).
- Staff Report
- Published: 23:28 August 24, 2008
Dubai: A decline in Dubai's oil revenue is unlikely to dent economic growth. In fact, the emirate is powering ahead with limited hydrocarbon resources, said a latest report by the Oxford Business Group (OBG).
"Since Dubai oil production peaked in 1991, the central question concerning energy matters has not been about production, but how much it needs to fuel its robust economy," says the OBG report.
This switch is demonstrated by the fact that, whereas in the 1980s the oil sector accounted for around half of Dubai's GDP, and the emirate's light and sweet crude was the benchmark for all of the Middle East's production, the industry now accounts for around five per cent.
However, most of the major energy sector companies already have, or are in the process of, moving to Dubai, as the emirate consolidates its role as a regional business hub.
US oil industry services company Halliburton's announcement that it would relocate its headquarters to Dubai caused a ripple in international energy circles. Upstream majors such as BP and Shell are also heavily involved in Dubai.
BP controls its regional downstream activities of refining and distribution from the emirate, in this respect exploiting Dubai's communication channels, while remaining centred in Abu Dhabi, the UAE's energy powerhouse.
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