Oil at heart of renewed UAE-Saudi border dispute
|02 August 2005|
The United Arab Emirates (UAE) has rekindled a long-standing territorial dispute with Saudi Arabia in a bid to grab a share of a giant border oilfield that contains nearly 1.5 per cent of the world's total crude resources.
Just eight months after the death of Sheikh Zayid bin Sultan al-Nahyan, its pragmatic leader and founder, the UAE surprisingly declared that a 31-year-old border pact with its giant neighbour was no longer in force. While analysts rule out a military confrontation, they acknowledge that such a declaration by a top royal figure could harm relations and increase tension between the two Gulf oil heavyweights.
At the heart of the dispute is the giant Shaybah oilfield. Discovered in 1968, the field straddles the UAE-Saudi border and is believed to be one of the world's largest onshore oilfields, with current estimated proven reserves of 15.7 billion barrels.
Up until 25 December 2003, the field had yielded one billion barrels, however oil industry sources believe its recoverable oil potential could rise to 18 billion barrels in a few years with the deployment of new technology, such as horizontal drilling. Besides oil, the field contains in excess of 25 trillion cubic feet of associated gas, almost equivalent to Oman's total gas reserves.
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