meed-logo

line1 line2 line3
SIGN IN / REGISTER

Non-oil activity underpins UAE economy

11 April 2024

The latest news and analysis on the UAE includes:

> Dubai real estate boosts construction sector
> UAE and Kenya launch digital corridor initiative
> UAE in talks to invest in European nuclear power infrastructure
> Abu Dhabi’s local content awards surge to $12bn
> Dubai tunnels project dominates UAE pipeline
> UAE marks successful power project deliveries

 

Economic activity in the UAE appears to be holding up relatively well amid the regional turmoil sparked by the start of the Gaza war in November.

Abu Dhabi recorded GDP growth of 3.1% in 2023, according to full-year estimates released by the Statistics Centre Abu Dhabi on 1 April. That marks a substantial drop from the 9.3% level seen in 2022, but an improvement on the 2.3% growth over the first nine months of 2023.

Despite falling oil prices and the disruption to Red Sea shipping in the final quarter, there have been ongoing positive signs for the non-oil sector, which now accounts for around 53% of the total economy. Non-oil activity grew by 9.1% in 2023, down only slightly from the 9.2% level recorded a year earlier.

That non-oil activity is likely to continue to be a key element for economic growth for as long as the UAE and its partners in the Opec+ alliance maintain their voluntary restrictions on crude production. There is no clear timeline for when that policy might change, but David Pickett, assistant economist at Oxford Economics, said he anticipated “a significant increase in oil production from 2026, aided by new facilities and subsiding geopolitical uncertainty”.

In the meantime, the Central Bank of the UAE has adjusted its growth expectations for this year, cutting its forecast for 2024 from the previous 5.7% to 4.2% while predicting a rebound to 5.2% the following year—figures that are higher than many independent observers’ expectations.

Trade and investment

A wave of free trade deals is helping the country’s economic prospects. To date, the UAE has signed comprehensive economic partnership agreements (CEPAs) with 12 countries, the most recent being with Kenya in late February. Another is due to be finalised with Malaysia by June.

Deals with India, Indonesia, Israel, Turkey and Cambodia have already come into effect, while others with Colombia, Costa Rica, Georgia, Kenya, Mauritius, South Korea and the Republic of Congo are all in line to follow. Trade talks are ongoing with numerous other countries, including Australia, Chile, the Philippines and Vietnam.

However, the rapid pace of negotiations means it is not yet clear what impact these deals are having on trade flows.

“It is arguably too early to assess the economic impact of these trade agreements, with many coming into force less than 12 months ago and with full bilateral trade data for 2023 yet to be published,” said Jeanne Walters, senior economist at Dubai-based Emirates NBD, in a report published in early March.

Also helping the country’s position is its release in February from the strictures of the Paris-based Financial Action Task Force’s ‘grey list’ of jurisdictions under increased monitoring. The UAE authorities had been targeting this development for some time, and it should ease the path of economic growth for a country that relies heavily on international trade.

Minister of State Ahmed Bin Ali Al Sayegh set out the decision’s importance soon after the announcement, saying it “enhances investors’ and international financial institutions’ confidence in the country’s economy and financial system, especially considering the UAE’s status as a financial, commercial and economic hub”.

One measure of the country’s commercial reputation is its ability to attract investment. Despite increased competition from Saudi Arabia for international capital, a March report by Emirates NBD Research found that the UAE was second only to the US globally in terms of the number of greenfield foreign direct investment (FDI) projects it attracted in 2023.

The number of UAE FDI projects for 2023 was recorded at 1,280, up 36% on the previous 12 months. Most of these were in Dubai, which attracted 1,036 projects – more than any other city in the world – while Abu Dhabi had 172 projects.

In an effort to continue to attract international capital, the government is now said to be looking at offering 10-year ‘golden licences’ to businesses. The topic was discussed at a meeting of the Economic Integration Committee, chaired by Economy Minister Abdulla Bin Touq, in late March.

Inclement geopolitics

Perhaps the biggest cloud on the horizon is the brutal Gaza war, which could yet have a larger economic and domestic political impact, not least because of the sensitivity around the UAE’s diplomatic relations with Israel.

Like other Gulf countries, the UAE has been sending a steady stream of humanitarian aid to Gaza, but those efforts received a setback on 2 April, when Israel attacked an aid convoy run by World Central Kitchen – a partner of the UAE and others in the Amalthea Initiative aimed at providing a maritime corridor for aid from Cyprus to Gaza.

The UAE’s Ministry of Foreign Affairs issued a statement in which it “condemned in the strongest terms” the Israeli strike. Emirati officials were already understood to be considering ways to offer more protection to aid deliveries, and this will now be even higher up the agenda.

Even as relations have soured, there has been no indication that the country is considering altering its diplomatic ties with Tel Aviv, forged under the Abraham Accords of September 2020.

Nevertheless, while there has been little outward sign of public discontent within the UAE over the conflict, officials around the Gulf are said to be increasingly wary of the potential for the war in Gaza to cause a popular backlash.

One lesson from the broader region in recent decades is that an economic downturn can encourage political discontent, too, but it is far easier to maintain public order in a prosperous economic environment. By that measure, the UAE should have little to fear, given its robust non-oil performance of late.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11662621/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Activity ramps up in Syria’s oil and gas sector

    3 June 2026

     

    Foreign interest in Syria’s oil and gas sector is growing as the government moves to revive the industry and elevated global energy prices improve the economics of new developments.

    A series of agreements signed in recent months has attracted some of the world’s largest energy companies, raising expectations that investment and production could accelerate.

    However, despite growing optimism, significant security, financial and regulatory challenges remain, which could constrain the pace of growth for years to come.

    Military control

    Optimism among foreign businesses about potential opportunities in the country was boosted in January this year when Syria’s central government regained control of most of the country’s oil and gas assets.

    On 13 January 2026, the Syrian government launched an offensive against the Kurdish-led Syrian Democratic Forces (SDF) in the territories of the Democratic Autonomous Administration of North and East Syria.

    The offensive was initially focused on eastern Aleppo Governorate, around the towns of Deir Hafer and Maskanah, and was expanded on 17 January to include Raqqa, Deir ez-Zor and Al-Hasakah Governorates.

    The offensive eventually led to Syria’s Omar and Conoco fields being seized, as well as the Tanak, Rmeilan and Suwaydiyah fields.

    The Omar field is Syria’s largest oil field and the Conoco field hosts Syria’s largest gas processing plant, which previously supplied several power stations, including the Jandar plant in Homs, one of the country’s largest.

    Before the outbreak of the Syrian civil war in 2011, this field produced about 10 million cubic metres of natural gas a day.

    On 18 January, an agreement was signed under which Damascus assumed administrative and security control over all major oil and gas assets previously held by the SDF in the northeast of the country.

    Wider market

    The push to take control of the oil and gas assets came ahead of the US and Israel attacking Iran on 28 February, which led to a regional conflict and disrupted shipping through the Strait of Hormuz.

    Disruption in the waterway – which normally transports about 20 million barrels a day (b/d) of oil and refined products, as well as around 20% of the world’s liquefied natural gas – triggered a surge in global energy prices and sent oil companies scrambling to develop resources that did not rely on the strait as an export route.

    Syria is increasingly being viewed as a potential option for major oil and gas development projects due to its significant unrealised reserves and its geographic position across the Mediterranean from consumer markets in Europe.

    Syria’s production currently stands at around 110,000 b/d, down from a peak of 380,000 b/d in 2011, according to a report published by the US-Syria Business Council in April.

    The country’s recoverable oil reserves are estimated at 2.5 billion barrels, and Syria also has significant gas reserves.

    In April, Yousef Qiblawy, chief executive of the state-owned Syria Petroleum Company (SPC), said his organisation aimed to double national production before 2027 and boost output to 800,000 b/d by the end of 2029, not including offshore production.

    He said: “Before the takeover of the northeast, we were producing 10,000-15,000 b/d.

    “Currently, we are producing 100,000 b/d, and the plan now is to double this production number by the end of this year.”

    He also expressed optimism about the outlook for projects in Syria’s portion of the Mediterranean Sea, saying: “New offshore and onshore exploration is also starting … there are 15 or 17 brand new green blocks, untouched in Syria, with huge reservoirs of oil mainly, and some gas.”

    So far, no offshore wells have been drilled in Syrian waters.

    In 2013, Russia’s Soyuzneftegaz signed an offshore exploration agreement with Damascus, but the project was abandoned during the civil war and never progressed to drilling.

    Making deals

    In recent months, a range of significant deals and meetings has raised expectations for the future of Syria’s oil and gas sector.

    On 11 May, SPC announced plans for Syria’s first-ever offshore oil and gas exploration project.

    The deep-water project is being carried out in partnership with US-based Chevron and Qatar’s UCC Holding.

    SPC said that it had, together with Chevron and UCC Holding, defined the boundaries of the offshore block, paving the way for finalising contracts and starting technical operations this year.

    The three companies previously signed a preliminary deal in February to evaluate offshore oil and gas exploration in Syrian waters.

    On 12 May, France’s TotalEnergies, state-owned QatarEnergy and US-based ConocoPhillips signed a memorandum of understanding (MoU) with SPC relating to the exploration of Syria’s offshore Block 3.

    Under the terms of the preliminary deal, the companies will carry out a technical review of the area.

    The agreement also established a framework for technical and commercial discussions related to exploration activities on the block.

    ConocoPhillips also signed another MoU in November last year, along with Houston-headquartered Novaterra Energy, focused on developing several gas fields and launching exploration programmes.

    This MoU included an agreement to rehabilitate the gas plant at the Conoco field in Deir ez-Zor province.

    At the time, Qiblawy said the agreement was expected to boost the country’s gas production by 4-5 million cubic metres a day within a year.

    On 8 May, the Croatian oil company INA and Hungary’s MOL announced that they had held a series of meetings with SPC focused on exploring options to restart INA’s oil and gas operations in Syria.

    They said a joint technical team established by INA and SPC was assessing the feasibility of INA resuming operations on its Syrian concessions by evaluating operational, technical, commercial and regulatory conditions.

    In 2011, oil and gas production at INA’s Syrian concessions had reached 37,300 barrels of oil equivalent a day.

    By the time the company suspended operations in Syria in 2012, it had invested approximately $1.1bn in the country and had built a gas processing plant at the Hayan gas field.

    Resuming activities

    In April, the managing director of London-headquartered  met with Syria’s president, Ahmed Al-Sharaa.

    Gulfsands is the official operator of Syria’s Block 26, but for 15 years after the start of the Syrian civil war, it could not access the asset.

    The company declared force majeure in late 2011 and, until recently, it was under the control of the Kurdish-led SDF.

    In a statement released after the April meeting with Syria’s president, John Bell confirmed that his company had recently regained access to Block 26, which he described as “an important milestone for Gulfsands and for Syria”.

    He added: “This development provides a strong foundation for the recommencement of operations and investment.

    “We are now back on the ground in Syria, working closely with SPC to accelerate towards a full resumption of activities.”

    Bell also said that, as a result of a global drive to diversify away from “traditional choke points like the Strait of Hormuz”, Syria had the potential to become “a new world energy hub”.

    In April, Saudi Arabia’s ADES Holding Company signed an implementation contract with SPC to develop several gas fields in Syria.

    In a statement, SPC said the scope of the deal with ADES included executing maintenance and development works on existing wells, in addition to drilling new exploratory wells within the agreed operational areas.

    It added that it expected the deal to increase gas production by 25% within the first six months and by 50% by the end of this year.

    Industry insiders are also watching US-based HKN Energy, which has close ties to the Trump administration, after Qiblawy said in January that the company had expressed interest in entering the Syrian oil and gas sector.

    In April, a statement from the US-Syria Business Council said an MoU with HKN was “in the pipeline”.

    Over recent months, expectations have been building about a potential deal involving US-based oil and gas companies Baker Hughes, Hunt Energy and Argent LNG.

    In July last year, Jonathan Bass, chief executive of Argent LNG, said that the three companies were planning to develop a masterplan for Syria’s oil, gas and power sector.

    It was later reported, in February this year, that the three US-based companies were planning to form a consortium for oil and gas exploration and energy production in northeast Syria.

    The consortium is expected to become involved in approximately four to five exploration blocks.

    Commenting on his company’s plans in Syria, Argent LNG’s chief executive said: “We're very excited to be realising the visions of US President Donald Trump and Syrian President Ahmed Al-Sharaa, bringing the country forward from darkness to light.”

    In a separate statement in April, Hunter Hunt, chief executive and chairman of Hunt Oil Company, said: “President Sharaa’s vision is bold, it is comprehensive, and it is full of execution and getting things done … We like what we see on a forward-looking basis.”

    Challenges remain

    While SPC’s Qiblawy has outlined ambitious targets to increase oil and gas production and international interest in the sector is growing, significant obstacles remain.

    A report published by the US-Syria Business Council in April highlighted several risks facing prospective projects. Among the most significant is the threat posed by Islamic State, particularly to pipeline infrastructure crossing remote desert regions.

    The report warned that securing large stretches of sparsely populated territory remains difficult, increasing the risk of attacks on critical energy infrastructure.

    It also highlighted the possibility of renewed conflict in northeastern Syria, where the SDF previously controlled many of the country’s most important oil and gas assets. According to the report, the current ceasefire remains fragile and any deterioration in relations could reignite territorial disputes.

    Beyond security concerns, international investors continue to face substantial financial and regulatory hurdles.

    Although sanctions on Syria have been eased considerably, the country remains designated by the US as a State Sponsor of Terrorism. As a result, licences are still required for many controlled exports, including oilfield equipment, software and technology.

    Restrictions also remain on support from international financial institutions. The US Export-Import Bank and the US International Development Finance Corporation continue to face limitations on their ability to support projects in Syria, constraining access to capital for large-scale developments.

    These factors suggest that progress towards SPC’s production targets is likely to be slower than official projections imply.

    Nevertheless, if Syria can continue to improve security conditions, strengthen political stability and maintain a supportive investment environment, the country’s oil and gas sector has the potential to deliver steady production growth over the coming years.

    For international energy companies seeking opportunities outside traditional export routes and geopolitical chokepoints, Syria is increasingly emerging as a market with significant long-term potential, albeit one accompanied by substantial risk.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17088770/main.png
    Wil Crisp
  • Aramco and Emerson partner for corrosion management

    3 June 2026

    Saudi Aramco has entered into a partnership with US-based industrial automation provider Emerson to jointly develop corrosion management systems.

    As part of the corrosion research and development collaboration, Aramco will “combine its expertise and intellectual property with Emerson’s advanced corrosion solutions to digitalise and transform corrosion management”, Emerson said in a statement.

    For Aramco, corrosion management is a strategic priority that is closely linked to operational performance, safety and environmental stewardship. Continuous corrosion monitoring can replace labour-intensive and potentially hazardous manual inspections while providing a reliable stream of digital data to support decision-making and asset integrity management.

    The collaboration builds on the companies’ existing relationship. In May, Emerson announced the deployment of an artificial intelligence-driven optimisation system for Aramco.

    The current phase of that initiative focuses on expanding a hybrid modelling approach for hydrocracker units across Aramco’s operations. The expansion is expected to improve model accuracy while demonstrating the scalability and robustness of the AI-driven optimisation strategy across the company’s asset base.

    Emerson has steadily expanded its presence in Saudi Arabia over the past 16 years. Key milestones include the opening of facilities in Jubail, Dammam and Dhahran, as well as the launch of a manufacturing hub at King Salman Energy Park (Spark) in 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17091834/main4428.jpg
    Indrajit Sen
  • Iranian drones hit Kuwait International airport’s Terminal 1

    3 June 2026

    Kuwait International airport was struck by a fresh wave of hostile drone attacks on 3 June. The drones caused significant structural damage to Terminal 1 and wounded several individuals.

    Brigadier General Saud Abdulaziz Al-Otaibi, official spokesman for the Ministry of Defence, blamed the strikes on “criminal Iranian aggression”. He confirmed that the injured had been evacuated for medical care and stated that the armed forces remain in a state of complete readiness to secure the state.

    The incident is the third major drone strike on the hub in recent months. On 1 April, a drone strike hit fuel tanks managed by Kuwait Aviation Fuelling Company, sparking massive fires. On March 28, another multi-drone raid severely damaged the airport’s primary radar systems.

    The airport is being expanded with the construction of a new terminal, and works on the project are expected to be completed by 2027. It consists of three packages.

    These are:

    • Package 1: Main works – $4,329m
    • Package 2: Multistorey car park building, connection roads, bridges and landscaping works – $550m
    • Package 3: Aircraft parking, runways and service buildings – $950m

    Turkiye’s Limak Holding is executing the main works.

    The terminal building was designed by Foster+Partners and Gulf Consult.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17089683/main.gif
    Colin Foreman
  • Consortium signs PPA for Taweelah C power plant

    3 June 2026

    Emirates Water & Electricity Company (Ewec) has confirmed it has signed a power-purchase agreement (PPA) with a developer consortium for the Taweelah C independent power producer (IPP) project.

    The agreement, which will run through to 2050, was signed with Abu Dhabi National Energy Company (Taqa), Al-Jomaih Energy & Water Company (Saudi Arabia) and Sembcorp Industries (Singapore), the utility said in a statement.

    Taqa will own a 60% stake in the project, with the international consortium holding 40%. The ADX-listed company will also own 40% of the project’s operations and maintenance company, while the international consortium will own 60%.

    Last month, MEED exclusively revealed that the winning consortium had been selected for the project, with the PPA initially expected to be signed in mid-May.

    It is understood that China Energy Engineering Corporation (CEEC) will be the engineering, procurement and construction contractor.

    The combined-cycle gas turbine plant will have a capacity of about 2.5GW. It will be located at the Al-Taweelah power and desalination complex, about 50 kilometres northeast of Abu Dhabi city.

    Taweelah C is part of Ewec’s wider programme to support the UAE’s Net Zero by 2050 Strategic Initiative and the Abu Dhabi Department of Energy’s Clean Energy Strategic Target 2035.

    Ewec plans to raise solar power capacity to 18GW and wind capacity to 2.6GW by 2035, while reducing the carbon intensity of its power generation by more than half compared with 2019.

    The Taweelah C IPP is now expected to start commercial operations in 2029. The facility had previously been scheduled to begin commercial operations in the fourth quarter of 2028.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17089163/main3254.jpg
    Mark Dowdall
  • Local contractor wins Oman water transmission contract

    3 June 2026

     

    Local contractor Al-Jesr United has won the main engineering, procurement and construction contract to reinforce Oman’s Sur water transmission system.

    The contract, awarded by state-owned utility Nama Water Services (NWS), forms part of a project to improve the reliability of potable water supply to Sur, a coastal city about 200 kilometres southeast of Muscat.

    The scheme, estimated to cost $80m, is designed to strengthen the network’s resilience during peak-demand periods and emergencies.

    The scope of work includes upgrading the pumps at the Sur DP Pump Station with variable frequency drive units and replacing ductile iron pipes and fittings within the facility. It also covers about 17km of new transmission pipelines.

    According to regional projects tracker MEED Projects, at least five local firms submitted commercial bids for the contract, which was tendered in August 2025.

    These include:

    • Al-Jesr United
    • Al-Rafaa Trading & Contracting
    • Gulf Petrochemical Services & Trading
    • Professionals Trading
    • Sarooj Construction Company

    In June 2024, NWS awarded a $1.3m contract for the project’s design and construction supervision to Muscat-headquartered Ibn Khaldun Almadaen Engineering Consultants.

    Sur is home to one of the sultanate’s key desalination plants, which supplies potable water to communities across eastern Oman. 

    The water transmission project will support network expansion in areas such as Al-Aigah and Ahiae, as the existing ductile iron pipeline serving Wilayat Sur is no longer sufficient to meet current and future demand.

    Construction is expected to start in the third quarter of 2026 and take about two years to complete.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17088454/main.jpg
    Mark Dowdall