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Oil in Dubai: history of discovery and impact on the economy of the UAE

Article image: Oil in Dubai: history of discovery and impact on the economy of the UAE

Today it is difficult to imagine that on the place of luxury hotels, shopping malls and skyscrapers in Dubai was once dry desert with a small settlement. Currently, the city is considered to be a symbol of progress and victory of humanity over nature and other circumstances. Despite dry climate and other adverse conditions, Dubai is significantly ahead in terms of economic development of mega – cities of other powerful countries. No other country is matching the UAE in terms of luxury. The locals even have an interesting saying on this subject: “We wanted the best, but it turned out even better than we wanted!”.

History of oil discovery in Dubai

The history of Dubai can be divided into two periods: before and after discovery of oil reserves. Before oil was discovered in Dubai, the place was mostly inhabited by Bedouins, who were engaged in cultivation of dates, breeding camels and goats. And proximity to the sea has made Dubai the center of trade with European countries. City life has changed dramatically when oil fields Fateh were discovered in 1966, 60 nautical miles from the coastline. They were quickly developed, and in 1969 the first batch of “black gold” - 180 thousand barrels – was exported.

1970s and 1980s of the last century were marked for Dubai by discovering other marine deposits of oil, in particular Rashed and Falah and onshore field Margam. Peak of “black gold” production in the Emirate was in 1991, when the total volume of crude oil amounted to around 410 thousand barrels per day. Currently 68 million barrels of precious liquid is annually produced in Dubai.

How did discovery of oil influence the economy of the UAE?

Discovery of oil on the territory of the Emirates prompted rapid growth of the UAE economy. Especially country began to develop rapidly after sharp rise in prices for “black gold” in 1973. Throughout 25 years the UAE has become a country with one of the highest living standards. Today, every fifth citizen of the United Arab Emirates is a millionaire. Government grants to the newlyweds 100 000 dollars for wedding and for each birth women are paid 20 thousand dollars and in addition land is allocated.

Due to profits from oil exports transport network has greatly improved in Dubai. Today the UAE may be proud of perfectly smooth roads, modern international airports and seaports. Development of oil industry in the country has also attracted foreign labor force - the proportion of foreigners in the country is more than two thirds of the total population. Huge investments are made in the construction sector and tourism - Dubai is famous for luxury hotels, restaurants, shopping centers. Also investment activity in the UAE is aimed at development of agriculture and various factories and enterprises, including power, which provides fresh water not only for the people, but also green spaces, gardens and agricultural fields.

Understanding that oil reserves in Dubai may soon be exhausted, today the government of the UAE has an active policy of economic diversification in the direction of free trade zones, tourism, finances and re - exports. And Dubai has achieved impressive results in it - a lot of companies from around the world opened in the UAE their subsidiaries, branches and representative offices and work successfully in this country.

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