Abu Dhabi II: Emirate enlightened

Aired May 2007

Welcome to "Abu Dhabi - Emirate Enlightened"
In the heart of the Arabian Gulf…sitting on the North side of one of the largest islands lining the Gulf coast sits the United Arab Emirates…… a federation of 7 neighboring emirates AND Abu Dhabi, the capital and political center. Over the last 30 years the cities of Abu Dhabi and Dubai have placed the UAE on the world map. But it was not always like that……throughout most of its history, life in Abu Dhabi and the surrounding regions was an unending battle for survival against the harsh arid conditions of the desert. For generations the simple way of life of the sparse population remained largely unchanged, even up-until the mid-20th century. This is all in stunning contrast to the futuristic skyline of Abu Dhabi today. It plays a major role in the development of the entire country and is among one of the most modern cities in the world.

ENERGY

The country, whose economy was originally based on regional and local trading, was transformed dramatically by the discovery of oil in the 1950’s. Ruler Sheikh Zayed bin Sultan Al Nahyan, consistently used this oil revenue to provide Abu Dhabi and its citizens with the finest infrastructure, facilities and services that make for a dynamic location.

Today the UAE holds nearly eight percent of the world’s proven oil reserves, and has the world’s fourth-largest natural gas reserves. Its liberal foreign policy and openness to investment, makes it a major global player. Abu Dhabi is by far the biggest oil producer in the UAE. It controls almost ninety percent of the total oil output capacity. The emirate has also managed to double its proven oil reserves in the last decade, through major increases in rates of recovery.

Abu Dhabi has been successful at new finds – especially offshore – and discovering new oil-rich areas in existing fields. The Supreme Petroleum Council oversees the petroleum industry. Its directives are carried out by ADNOC, the state-owned Abu Dhabi National Oil Company. ADNOC was established in the early nineteen seventies, to operate in all areas of the oil and gas industry. In less than three decades, the company has steadily broadened its activities throughout different subsidiaries in exploration and production. It is also focused on support services to the oil and gas industry. One example of ADNOC’s subsidiaries is Fertil.

Increased domestic consumption of electricity and growing demand from the petrochemical industry has provided incentives for the UAE to increase its use of natural gas. It is also increasingly important, both for export, and for meeting demands from power generation and water desalination plants.

At the current rate of utilization, and excluding any new discoveries, these reserves will last for over 150 years. Almost 92% of the country’s gas reserves are located in Abu Dhabi. The main reservoir ranks among the largest single gas reservoirs in the world.
Abu Dhabi handles all its gas production through joint ventures with international companies. It is the only Gulf oil producer to retain foreign partners on a production-sharing basis. Oil companies from Japan, France and the UK among others, have ownership of almost half of the energy sector in Abu Dhabi. As part of an ambitious plan to expand its energy sector the UAE is planning to make a major investment in petrochemicals in the next few years. So, it’s no surprise that Fertil has high ambitions, too.

A multi-billion dollar program of investment is also underway in the natural gas sector in the UAE. The single largest investment is the Dolphin gas project, a joint venture with Qatar. Fifty one percent of the project is owned by the Abu Dhabi government. The project was launched in the late 1990’s following an announcement by the UAE and Qatar of plans for a joint venture aimed at transporting gas from Qatar's huge reserves to industrial consumers in the UAE, Oman and other countries. Dolphin is intended to provide a framework to stimulate investment in a variety of related industries throughout the value-added gas chain. Economic forecasters predict that the UAE's demand for gas will double over the next decade.

Enthusiasm about the prospects of Abu Dhabi is not difficult to find amongst investors.

FINANCE

Financial services are a key industry and one of the pillars of the UAE economy. Modern technology, solid regulation and improved competition have driven customer choice and service. Banks in the UAE are classified as either local or foreign. There are currently 25 foreign banks operating in the country. Among the local banks, four out of the top five are partly-owned by the governments of Abu Dhabi or Dubai.

The trend of banks in the UAE moving away from government-originated business to retail and investment banking is expected to continue. Growth in retail banking has been strong, with many banks offering more attractive services to customers. Mortgage lending is a new growth sector as the property market booms, and a number of banks are now also active in leasing. The burgeoning bond market is also expected to give investment banking a boost.

Based on centuries of tradition, Islamic banking has become globally popular over the last two decades. Islamic banking is based on Shariah law which forbids “ribah” or interest, in favor of profit sharing. 250 financial institutions worldwide already provide Islamic banking services. The UAE and Abu Dhabi has become a global center of excellence for Islamic banking.

ENVIRONMENT

Located in the central north of the UAE, Abu Dhabi is the capital of a coastal country. Numerous islands and lagoons provide an ideal environment for the abundance and growth of living marine resources.

Before the discovery of oil, the people living along the coastal regions of UAE depended on the sea for their livelihood. With the discovery of oil, however, the country witnessed great economic and social changes. It goes along with a growing consciousness about the need of environmental protection. Over the years a number of government organizations have been established with the role of studying and protecting the environment. It is a continuing showcase to highlight how this forward thinking emirate is trying to inclusively focus minds and energy towards a sustainable and forward thinking path to success.

REAL ESTATE

As one of the Middle-East’s most cosmopolitan capitals, the emirate is home to more than one hundred nationalities, and property is at a premium in Abu Dhabi. Also thanks to a strong performance in all sectors of the economy, along with a growing local population and liberalized policies, a real estate boom has taken hold in Abu Dhabi. Recent changes in property ownership laws and the incredible amounts of liquidity floating around the emirate have ignited this real estate sector. With some property markets around the world weakening, attractive prices and government support for the real-estate boom have brought investors from throughout the world to the UAE’s real-estate sector.

Experts predict that the far reaching changes in the property sector will lead to Abu Dhabi being one of the most exciting emerging real estate markets for the next five years at least.

EDUCATION

Resources and sustainability development are a major focus in Abu Dhabi, but investment in people is also high on the agenda. The Education system is the corner stone of this mission. From the earliest stages of its development, the government of the UAE realized the importance of the country's youth to its future progress. Education has historically been promoted by the government, which has always provided free education for UAE nationals and offered a wide array of curriculum options for the many Abu Dhabi based expatriates.

Today, every village in the UAE has its own primary school, and a number of secondary schools in the cities offer boarding facilities to ensure that a greater percentage of the population have access to education. There is also an extensive private education sector.

There is a strong focus on computer literacy and on English language teaching in higher education to equip young Emirates with the necessary skills. Generous grants are also available for those wishing to study abroad. Although much has been achieved in Education the country is not resting on its laurels. The Government recognizes that continual investment is required to ensure that graduates are properly equipped to enter the workforce and assist in the country’s development. From education to finance… founded in a sustainably aware climate of Energy riches, new opportunities are opening up every day in one of the world’s most high-potential, business-friendly and progressive Cities.

We hope we have given you an impression to the past and present of this dynamic emirate. The capital of an already booming country that looks set to be on course to a future that is even more enlightening.