The GCC states harbour in addition to their large oil wealth huge quantities of shale oil and gas, with the estimates ranging between 700-800 billion barrels. These vary in terms of depth and the cost of extraction from one region to another.

Although available technologies enable the production of approximately 10-15 per cent of such discoveries, the US experience in producing shale clearly indicates there is steady progress in creating new ones and reducing the cost of production. The cost on a per barrel basis has fallen from more than $80 (Dh294) just five years ago to less than $50 and expected to continue its decline that would allow the extraction of larger quantities at feasible commercial prices.

With rapid technological progress, Gulf countries can invest these resources to serve their development plans and projects. Investing in extracting shale oil and gas will depend on multiple factors and the needs of each country. Countries with large reserves of conventional oil will not need to extract shale, while those with fewer reserves will take advantage of the new discoveries to strengthen their oil sector and boost economic conditions.

This applies fully to shale gas, but the situation is quite different. Most countries need to develop their production when it would be available in commercial quantities, as is the case for Saudi Arabia and Bahrain. And we expect that to happen in the UAE, Kuwait and Oman as well.

Cost of extraction

In this case, the possibility for the extraction of shale gas will vary and needs to take into account the commercial and environmental aspects of the production processes. As the cost of extracting shale gas is much lower and more feasible than shale oil, the focus will likely be on producing the former. It began late last March in Saudi Arabia from its Jafurah field. This comes at a time when Bahrain announced the largest oil and gas find ever.

The existence of huge shale gas in the GCC will definitely open a wide scope for coordination and integration of current and future discoveries in Saudi Arabia, the UAE, Kuwait, Bahrain and Oman. As is widely known, there are increased needs for gas in development uses, especially petrochemical projects, the production of electricity, and to feed aluminium smelters, which depend on natural gas by up to 40 per cent. This helped GCC countries become one of the largest producers of aluminium in the world.

In case the countries coordinate efforts in the field of shale gas production, it will give rise to significant results for their energy policies. They can also become major exporters of natural gas rather than importers, as is the case at present.

On the one hand, it is possible to set up a natural gas network between the five countries and completely dispense with the Qatari gas. On the other, it is possible to set up platforms to collect and liquefy gas and then export it. It is known that the process of liquefaction requires large quantities of gas to become economically feasible.

This means that the shale oil and gas can change the Gulf energy map, open up scopes for inter-Gulf cooperation, and strengthen Gulf countries’ weightage in the global energy balance. This also means that cooperation in the field of natural gas and shale gas will be one of the most important links between these countries in the future and provide them with clean energy alternatives.

They will also become self-sufficient in natural gas at a time when its importance is growing in the world.

— Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.