New Oil Reserves found in Dubai – debt problems remain unresolved by Zivka Deleva

The government of Dubai covered in debts and dwindling oil resources last Thursday announced that they have discovered new offshore oil field for which they hope it would rescue their limping economy. The ruler of Dubai, Sheikh Mohammed bin Rashed al-Maktoum, shared the news with the people of the United Arab Emirates about the recent discovery of the new offshore oil field. The poor oil resources with which the UAE can manage are expected to be exhausted in 20 years, so this has been a good hit for an economy like theirs. The UAE sits on the world’s fifth largest proven oil reserves, amounting to 97.8 billion barrels of crude oil. But 95% of those reserves are cont! rolled by the leading partner in the federation, Abu Dhabi. The statement given from the UAE state news agency WAM did not provide information about the size of the field, but it said that this discovery will “enhance the comprehensive development of Dubai.” Dubai’s economy has noticed an immense growth and development in recent years on the count of non-oil sectors, particularly real estate and construction, which attracted huge investments, in addition to its prospering tourism sector. But Dubai’s rapid economic growth came to a grinding halt in the autumn 2008 when the financial crisis hit Dubai, drying out foreign financing that was vital for the overheated real estate sector. Dubai has heavily borrowed its way to build its economy, wasting on grandiose projects, mainly man-made tree-shaped islands, and now it is facing severe problems in meeting its debt obligations.

by Zivka Deleva for SigEx Ventures (http://sigexventures.com)

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