Abu Dhabi // The oil story in what was to become the UAE precedes the formation of the confederation by more than two decades.
40 years of the UAE:
Flying the flag The National counts down to the historic anniversary. Learn more
In 1950, Petroleum Development (Trucial Coast), a subsidiary of the Iraq Petroleum Company (IPC), began drilling at Ras Sadr, Abu Dhabi.
The well was found to be dry and IPC's shareholders, modern-day BP, ExxonMobil, Shell and Total, were left disappointed.
But exploration continued and, much to the delight of Abu Dhabi's 20,000 citizens, oil was eventually found in 1954 at Bab.
Four years later, the first offshore discovery was made at the Umm Shaif offshore field close to Das Island in 1958.
The Das project used an underwater drilling barge that had to be towed almost 11,000 kilometres from Germany by tugboats.
The discovery of oil transformed Abu Dhabi. In From Rags to Riches, his history of the emirate, Mohammed Al Fahim wrote that in 1959 his father "moved his stock and shop" from Al Ain to Abu Dhabi.
As his family migrated between the two settlements, "the number of people who remained on Abu Dhabi island throughout the year began increasing along with the growing importance of the oil industry".
Several more discoveries were made in the 1960s, including the offshore commercial discoveries Zakum in 1964 and Abu Al Bukhoosh and Umm Al Dalkh in 1969.
Onshore, Bu Hasa, Asab, Shah, Sahil and Al Dabbiya were all discovered by 1969. When production commenced in 1962, a mere 14,200 barrels left the ground every day. The following year, production had risen by more than 200 per cent to 48,200 barrels per day (bpd).
By the time the UAE was founded in 1971, Abu Dhabi had become a major player in the oil industry and the fourth largest producer for the Organisation of the Petroleum Exporting Countries (Opec).
Sheikh Zayed, who became Ruler of Abu Dhabi in 1966, used much of his new oil wealth to foster a sense of unity amongst the disparate emirates.
When the Northern Emirates were asked to enter the union that had been thrashed out by Abu Dhabi and Dubai, Sheikh Zayed's generosity and popularity throughout the nascent nation were crucial in convincing them to join.
Valérie Marcel described Sheikh Zayed's balancing act in her 2006 book, Oil Titans. "He put pressure on the foreign oil companies to increase exploration and production so that his ambitious modernisation programme could be paid for, but he maintained a cooperative attitude towards them that contrasted with the nationalist confrontations elsewhere in the Middle East."
Abu Dhabi joined Opec in 1967. With the creation of the UAE, the emirates spoke with one voice at the organisation.
If output changes were demanded, it was Abu Dhabi that increased or cut production, acting as a swing producer while Dubai production remained steady.
Dubai has contributed steadily to the country's output, first producing oil in 1969. Production peaked in 1991 at 410,000 bpd but has dropped sharply, averaging only 55,000 bpd today, contributing about 2 per cent of the emirates' gross domestic product (GDP).
After the founding of the UAE in 1971, the Abu Dhabi National Oil Company (Adnoc) was created.
It ended up taking a 60 per cent stake in the onshore production arm, Adco, and the offshore arm, Adma-Opco. Adnoc's portfolio continued to grow. Today, 16 subsidiaries are under the umbrella of the national oil company.
Crude oil production in Abu Dhabi increased steadily to an initial peak of two million bpd in 1977. After a decline in global demand, production fell, but has increased most years from 1986.
In 2008, the emirate's crude oil production reached a new peak of 2.6 million bpd as oil prices soared.
Abu Dhabi currently produces about 2.5 million bpd, making use of almost its entire capacity.
The emirate is one of only three Gulf states with spare capacity and made use of it this year to compensate the world market for the outage of Libyan oil.
Abu Dhabi's ambitions exceed current oil production levels. The emirate has long held plans to increase production to 3.5 million bpd and several expansion projects are under way.
Oil has had a big part to play in bringing the nation together and, after 40 years of statehood, a big story is turning epic.
The biog
Favourite films: Casablanca and Lawrence of Arabia
Favourite books: Start with Why by Simon Sinek and Good to be Great by Jim Collins
Favourite dish: Grilled fish
Inspiration: Sheikh Zayed's visionary leadership taught me to embrace new challenges.
TEST SQUADS
Bangladesh: Mushfiqur Rahim (captain), Tamim Iqbal, Soumya Sarkar, Imrul Kayes, Liton Das, Shakib Al Hasan, Mominul Haque, Nasir Hossain, Sabbir Rahman, Mehedi Hasan, Shafiul Islam, Taijul Islam, Mustafizur Rahman and Taskin Ahmed.
Australia: Steve Smith (captain), David Warner, Ashton Agar, Hilton Cartwright, Pat Cummins, Peter Handscomb, Matthew Wade, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Glenn Maxwell, Matt Renshaw, Mitchell Swepson and Jackson Bird.
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Essentials
The flights
Emirates flies direct from Dubai to Seattle from Dh6,755 return in economy and Dh24,775 in business class.
The cruise
UnCruise Adventures offers a variety of small-ship cruises in Alaska and around the world. A 14-day Alaska’s Inside Passage and San Juans Cruise from Seattle to Juneau or reverse costs from $4,695 (Dh17,246), including accommodation, food and most activities. Trips in 2019 start in April and run until September.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
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RedCrow Intelligence Company Profile
Started: 2016
Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel
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Investment: $745,000
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Transgender report
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Paatal Lok season two
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Graduated from the American University of Sharjah
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Has helped solve 15 cases of electric shocks
Enjoys travelling, reading and horse riding
Schedule:
Friday, January 12: Six fourball matches
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A cheaper choice
Vanuatu: $130,000
Why on earth pick Vanuatu? Easy. The South Pacific country has no income tax, wealth tax, capital gains or inheritance tax. And in 2015, when it was hit by Cyclone Pam, it signed an agreement with the EU that gave it some serious passport power.
Cost: A minimum investment of $130,000 for a family of up to four, plus $25,000 in fees.
Criteria: Applicants must have a minimum net worth of $250,000. The process take six to eight weeks, after which the investor must travel to Vanuatu or Hong Kong to take the oath of allegiance. Citizenship and passport are normally provided on the same day.
Benefits: No tax, no restrictions on dual citizenship, no requirement to visit or reside to retain a passport. Visa-free access to 129 countries.
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Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
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Name: Hassan Mohsen Elhais
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