The Environmental Atlas of Abu Dhabi Emirate

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O IL & N ATURAL G AS H ISTORY T HE L ONG M ARCH T O M ODERNITY

Visionary Leadership and Investment X With oil revenues flowing, albeit slowly at first, the demands from a long-suffering population for rapid socio-economic development became overwhelming. This requiredprogressive and visionary leadership with a focus on the future investment of new- found wealth. On 6 August 1966, the ruling Al Nahyan family decided that the time had come for Sheikh Shakhbut to step down and for his younger brother, the highly respected Sheikh Zayed, to take his place. This change of leadership marked a new dawn in Abu Dhabi’s development and the historic

era of modernisation had begun. During Sheikh Zayed’s first years in power, roads were constructed, electricity was installed, hospitals and schools were built along with Abu Dhabi’s first port and airport, and government departments were established, as a modern, dynamic city and Emirate began to emerge. These changes transformed the quality of life for countless citizens and would accelerate and diversify in the decades ahead.

The story of the Abu Dhabi oil industry mirrors the recent history both of the Emirate and of the UAE. It involved an eventful and fascinating journey with a long and sometimes difficult early history. Approximately twenty years elapsed between the signing of the first oil concession and the discovery of oil in commercial quantities. Even after oil was discovered, the immediate impact

and benefits to the citizens of Abu Dhabi were quite limited. It was only after 1966 that the oil wealth was first deployed to begin the transformation of Abu Dhabi into a modern state and later, in 1971, to support the formation of the UAE. This journey required endurance and commitment with significant milestones and obstacles along the road.

Riches From the Sea T After the Second World War, the development of new drilling techniques allowed deeper offshore waters to be explored. In 1949, the Rulers of the Emirates promoted their claim to a portion of the continental shelf in the Arabian Gulf. However, IPC claimed that their 1939 concession also covered these offshore waters. Regardless, Sheikh Shakhbut signed an agreement with the Superior Oil Company, a British-Canadian firm, covering the whole of Abu Dhabi’s continental shelf. IPC protested and the issue was referred to arbitration. An international tribunal in Paris in August 1951 attended by the Ruler and

Sheikh Zayed decided that Sheikh Shakhbut had acted legally in granting the 1950 concession, which was subsequently validated. On 9 March 1953, Sheikh Shakhbut signed a new concession with the D’Arcy Exploration Company, a subsidiary of British Petroleum, covering 30,370 square kilometres of seabed on Abu Dhabi’s continental shelf. In 1955, this was assigned to a new company, Abu Dhabi Marine Areas Ltd. (ADMA), two-thirds owned by BP and one-third by Compagnie Francaises des Petroles (CFP), now known asTOTAL.

Cousteau’s Surveys X In the mid-1950s, the research ship Calypso sailed into the warm waters of the Gulf and conducted seabed studies under the direction of the world-famous French explorer, Jacques-Yves Cousteau. These surveys identified the old pearl bank of Umm Shaif as a possible area for oil exploration. As a result of these surveys, in 1957 a drilling rig, ADMA Enterprise, was constructed in Germany and slowly towed to the Gulf, where the Umm Shaif-1 well was spudded in January 1958 as the first offshore well in the Emirate. This first well produced nearly 4,500 barrels of oil per day and ADMA realised that Umm Shaif was a hugely significant oil field. Further wells were quickly drilled and a pipeline laid to Das Island, enabling the first export shipment of Abu Dhabi crude oil in 1962. In the following year, an even bigger offshore field was discovered to the south-east of Das known as the Zakum field. In 1996, 1 year before his death, Cousteau received a special award from Sheikh Zayed to acknowledge his contributions to the fortunes of Abu Dhabi.

Reproduced with permission from the BP Archive

Early Days S In the 1920s, the Rulers of the Trucial States, then in 'special treaty relations' with Britain, had signed agreements committing themselves to oil exploration exclusively with companies approved by the British Government. In January 1939, the first Abu Dhabi oil concession was signed by the then Ruler, Sheikh Shakhbut bin Sultan Al Nahyan. The 75-year agreement was signed with the Iraq Petroleum Company (IPC), a consortiumthat included twoBritish-based companies, as well as firms from the United States and France. It was subsequently allocated to an IPC subsidiary, Petroleum Development (Trucial Coast) [PD(TC)]. Painful Delays T IPC had already carried out small-scale geological surveys in the mid-1930s. However, the Second World War brought a halt to exploration, which was not to resume until 1946. This delay was unfortunate as a new source of income was desperately needed by the Ruler and his citizens. The collapse of the pearling industry in the 1930s caused great economic hardship and during the war years, malnutrition and disease ravaged local communities.

2009 ADNOC signs agreement for exploitation of Shah sour gas reserves

2004 Sheikh Zayed passes away, succeeded as UAE President and Ruler of Abu Dhabi by Sheikh Khalifa bin Zayed

2003 The first zero gas flaring project at ADCO’s Bab field commissioned

2009 UAE’s first pilot CO 2 injection well commissioned in ADCO’s Rumaitha field

The Quest Begins T In February 1950, PD(TC) spudded the UAE’s first oil well at Ra’s Sadr to the north-east of Abu Dhabi City. This was the deepest well drilled in the Middle East so far. However, it proved to be dry and efforts were diverted to another well at Jebel Ali in Dubai, which also failed. PD(TC) then returned to Abu Dhabi, carrying out seismic work near Mirfa and establishing a base camp at Tarif in 1952. The Murban-1 well drilled between 1953 and 1954 was also unsuccessful. Further seismic work was undertaken onshore and offshore from 1953–1957 with more unsuccessful wells being drilled at Jazira, Sabkha Matti and Shuweihat. A second well was drilled at Murban

1998 Borouge was formed as a joint venture between ADNOC and Borealis, a prominent European polymer provider, to

in 1958, which although unsuccessful, provided encouraging signs of hydrocarbons and in 1959 the Murban-3 well was drilled. After 5 consecutive failures, this was a success and in late 1960, PD(TC) informed the Ruler that oil had been found in commercial quantities.The field was re-named Bab and work began on developing the oil field with a pipeline and terminal at Jebel Dhanna. In December 1963, a tanker with the first cargo of oil from the Bab field set sail and Abu Dhabi officially became an oil producer that would grow to attain global stature.

develop innovative polymer solutions

1980 Incorporation of Ruwais Fertilizer Industries (FERTIL)

2008 ADNOC awards new onshore concession to Occidental Petroleum

1996 Sheikh Zayed

awards Jacques- Yves Cousteau for his friendship and contribution to Abu Dhabi’s fortunes

1976 UAE’s first refinery opened at Umm Al Nar

1991 ADNOC’s first onshore oil discovery in Haliba structure

1974 ADNOC’s shares in ADMA and ADPC Concessions raised to 60% 1973 Das Island gas liquefaction plant construction inaugurated by Sheikh Zayed

1983 ADNOC’s first offshore oil discovery in Bu Dana structure

2002 ADNOC, ADMA-OPCO and ZADCO complete largest ocean bottom 3D seismic survey ever acquired over a producing field

1978 ADCO established to operate onshore concessions, GASCO created to develop onshore gas reserves

1994 First liquified natural gas (LNG) ship, the Al- Khazanah delivered to NGSCO

Natural Capital › Oil & Natural Gas History

1960 Oil struck onshore at Murban–3 well (field named Bab)

1967 Abu Dhabi joined OPEC

1984 First shipment of Ammonia from FERTIL

Mid-1950s Research ship Calypso sails into the Gulf, conducts seabed studies

2007 Dolphin Energy begins delivery of gas from Qatar to Abu Dhabi customers

1951 International tribunal in Paris confirms legality of offshore concessions 1954

1962–1963 First exports of onshore and offshore oil

1971 Formation of the United Arab Emirates

1939–1945 WWII - Oil Exploration Interrupted 1939 Abu Dhabi signs a 75-year

History of Oil in Abu Dhabi

1969 Oil discovered in the Abu al- Bukhoosh field offshore in Abu Dhabi by ADMA

1977 Abu Dhabi Marine Operating Company (ADMA-OPCO) set up to operate Umm Shaif and Lower Zakum fields

1985 Hydrocracker complex at Ruwais Refining was commissioned

1993 The National Gas Shipping Company Limited (NGSCO) is established

2001 GASCO and ATHEER merge making GASCO one of the largest gas processors in the world

1950 First onshore

1958 Oil discovered in the offshore Umm Shaif field in Abu Dhabi

1971 The Abu Dhabi National Oil Company (ADNOC) was formed

1962 PD(TC) became Abu Dhabi Petroleum Company (ADPC)

Abu Dhabi Marine Areas Ltd. (ADMA) was formed, takes over offshore concession

Mid-1930s Small-scale geological surveys are conducted

1949 Rulers claim rights to offshore waters

agreement with PD(TC) for oil exploration in all the Emirates

exploratory well sunk at Ra’s Sadr by PD(TC)

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