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Eyeing the Gulf

Middle East Prospects and projects

There is still plenty of room for expansion in the Middle East region.

Steve Turner outlines some of the opportunities in Abu Dhabi.

In 1996, Abu Dhabi and the United Arab Emirates celebrated their silver jubilee as a city and as a state. In those 25 years, Abu Dhabi has progressed from a small desert island in the Arabian Gulf to a prosperous and modern oil town, whose continually changing skyline rivals any to be found in the Middle East.

Abu Dhabi has vast reserves of both oil and natural gas. It possesses some 9.5% of the world's proven oil reserves, sufficient for at least another 100 years at current production rates, and around 5% of the world's natural gas reserves.

A high percentage of the revenue gained from the oil and gas has been ploughed back into upgrading the infrastructure of the Emirate.

Massive investment has been allocated to increasing the production of crude oil.

Since 1991 contracts valuing more than $5bn have been awarded, with a further $10 to $15bn to come over the next few years.

Substantial investment has also been made in the water and power sectors. But in future work will in the form of independent water and power projects (IWPPs), set up by a committee chaired by Sheikh Dhiyab bin Zayed al Nahyan.

These are design, build, own and operate projects, with the developer owning 40% and the rest held by the government and local investors. The first of the IWPPs has been awarded to US company CMS for a 720MW power and 50MGPD desalination plant.

It is estimated that over the next 10 years Abu Dhabi will require an extra 2000MW of electricity and a further 360 MGPD of clean water to cope with the massively expanding population.

Despite the abundance of work, Abu Dhabi is not an easy market to crack, and contracting, especially, is dominated by local operators.

The Emirates understand their own wealth and drive a hard bargain. Preference is given to businesses that bring inward investment.

Embassies in the region provide vital assistance to potential foreign investors. The commercial section of the British Embassy for example holds comprehensive information on the marketplace, which is otherwise hard to obtain.

Services to British export hopefuls include tailored market information reports, publicity support and free consultation with commercial officers.

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