From the EIA UAE Country Analysis Brief

According to Oil and Gas Journal (1/1/05), the UAE's natural gas reserves of 212 trillion cubic feet (Tcf) are the world's fifth largest after Russia, Iran, Qatar, and Saudi Arabia. The largest reserves of 196.1 Tcf are located in Abu Dhabi. Sharjah, Dubai, and Ras al-Khaimah contain smaller reserves of 10.7 Tcf, 4.1 Tcf, and 1.2 Tcf, respectively. In Abu Dhabi, the non-associated Khuff natural gas reservoirs beneath the Umm Shaif and Abu al-Bukhush oil fields rank among the world's largest. Current natural gas reserves are projected to last for about 150-170 years.

And as for oil, the EIA facts speak for themselves.

Figure 1
UAE Oil Production -- Click to enlarge

According to Oil and Gas Journal (1/1/05), the UAE contains proven crude oil reserves of 97.8 billion barrels, or slightly less than 8 percent of the world total. Abu Dhabi holds 94 percent of this amount, or about 92.2 billion barrels. Dubai contains an estimated 4.0 billion barrels, followed by Sharjah and Ras al-Khaimah, with 1.5 billion and 100 million barrels of oil, respectively.

Of course, when we look at this, we must bear in mind that Abu Dhabi made a spurious reserves revision of 31.0 Gb to 92.2 Gb in 1988. Despite production since then, reserves have increased despite the production shown in the Figure 1 above. By the way, if somebody would do the UAE Hubbert Linearization, that would be a welcome addition to this post. Nevertheless, let's press on.

Where does this oil go? In this older document Oil and Gas in the UAE, we find that about 94% of these exports go to the Far East in Asia, especially Japan, South Korea and Thailand. So, the US does not benefit directly from UAE oil exports. Superficially, this seemed to be a false lead in our quest for a connection between the port security contract and oil & gas exports. But let's move on again.

What about natural gas? This is where things become more interesting. The UAE has the fifth largest NG reserves in the world but look at this graph from the EIA.

Figure 2
UAE Gas Production -- Click to enlarge

And, they are an LNG exporter (from the same document).

Figure 3
UAE LNG Production -- Click to enlarge

But they are now becoming an importer of natural gas from Qatar in a project called Dolphin that links the gas pipeline network of Qatar, the UAE and Oman. The UAE is actively developing its own natural gas reserves but they only have a population of 2.5 million people. To put it bluntly, what the hell are they doing with all that natural gas? The EIA tells us.

The past few years have seen the UAE embark on a massive, multi-billion dollar program of investment in its natural gas sector including a shift toward natural gas-fired power plants and the transformation of the Taweelah commercial district into a natural gas-based industrial zone....

Most of the UAE's increased nautral gas needs in the next decade are to be satisified with imported natural gas from Qatar. Much of the natural gas development in the UAE itself involves the extraction of natural gas liquids (NGLs) and reinjection of the gas to maintain pressure in oilfields.

They're using it for enhanced oil recovery (EOR)! Which brings us to Qatar.

As I pointed out in Empire On the Edge--Betting On LNG sometime back, the US is making its future LNG arrangements with Qatar as we can see from another article Qatar to become world's leading LNG producer.

The US will be a primary market for the gas produced by the new units [processing trains]. This follows a memorandum signed in November 2005 by the US Energy Secretary Samuel Bodman that will mean America will buy up to 30 per cent of its entire LNG needs from Qatar. The agreement provides for the supply of some 15.6 million tonnes of LNG a year to the US market with deliveries beginning by 2009.

So, again to be blunt, by awarding multi-billion dollar contracts to the UAE, the US is accomplishing at least two things.

• Propping up the UAE's ability to produce oil and buy natural gas from Qatar to keep that oil flowing.
• Cementing good geopolitical relations with the governments of the fourth and fifth largest holders of natural gas reserves in the world.

This is just as far as I can establish a direct connection between the US port security deal with the UAE and world oil & gas exports. Obviously, what benefits the UAE also benefits Qatar--and what benefits Qatar and their LNG exports to the US is ultimately supposed to help the US get out from under the natural gas supply quagmire looming before us. Paranoia? Maybe so. But I think something stinks here. I'll let the facts speak for themselves.