Oil was discovered in Abu Dhabi in 1958, and the government of the emirate holds a controlling interest in all oil-producing companies in the federation through the Abu Dhabi National Oil Company (ADNOC). Abu Dhabi is responsible for approximately 95 percent of the country’s oil production, which contributes about one-third of the nation’s GDP. Despite employing only a small fraction of the workforce, the oil and gas sector plays a significant role in the economy. The largest petroleum concessions are held by ADNOC subsidiary, Abu Dhabi Marine Operating Company (ADMA-OPCO), with partial ownership by British, French, and Japanese interests. Notably, the Umm al-Shāʾif field is a major offshore site, and the Al-Bunduq offshore field is operated by ADMA-OPCO in collaboration with Qatar. Additionally, there are offshore concessions held by American companies, and onshore oil concessions held by another ADNOC company, the Abu Dhabi Company for Onshore Oil Operations, with partial ownership by American, French, Japanese, and British interests. Japanese companies also hold other concessions.

Dubai began petroleum production in 1969, with offshore oil fields at Ḥaql Fatḥ, Fallah, and Rāshid. Initially, Dubai maintained a controlling interest in its oil fields and took full control of oil production in 2007. At its peak, Dubai accounted for approximately one-sixth of the country’s total petroleum output. However, as the emirate diversified its economy, petroleum production dwindled to a negligible amount. Sharjah started producing oil in 1974, and later discovered a field that predominantly yields natural gas. In 1984, oil production began off the shore of Ras al-Khaimah in the Persian Gulf.

Abu Dhabi, the capital city of the United Arab Emirates, is known for holding the majority of the federation’s vast natural gas reserves, which are considered to be among the largest in the world. The late 1990s marked a significant period for the UAE as the country made substantial investments in the development of its natural gas sector. These investments were aimed at not only maximizing the export potential of natural gas but also enhancing the capabilities of domestic thermal power plants. The strategic focus on expanding the natural gas sector in Abu Dhabi has proven to be beneficial for the overall energy landscape of the UAE. The abundant natural gas reserves have allowed the country to diversify its energy sources and reduce its reliance on traditional fuels such as oil. This shift towards natural gas has not only enabled the UAE to meet its growing energy demands but also positioned it as a key player in the global energy market. Furthermore, the development of the natural gas sector in Abu Dhabi has had a positive impact on the economy, creating new job opportunities and attracting foreign investments. The increased production and export of natural gas have contributed to the country’s economic growth and sustainability. With a focus on sustainable development and energy security, Abu Dhabi continues to play a crucial role in shaping the future of the UAE’s energy sector.

Despite having substantial hydrocarbon reserves, the UAE has one of the highest per capita rates of energy consumption due to energy-intensive technologies like water desalination and air-conditioning, as well as fuel subsidies that encourage wasteful energy use. Rapid population growth and industrialization in the early 21st century led to a surge in domestic demand, forcing the emirates to import natural gas and utilize petroleum reserves at a fraction of the export price.

To ensure future hydrocarbon production, the federation has begun exploring alternative sources of domestic energy. In 2009, the UAE contracted the Korean Electric Power Company to construct four nuclear reactors by 2020. Abu Dhabi and Dubai have also invested in renewable energy, with Abu Dhabi opening one of the world’s largest solar power plants in 2013, capable of powering up to 20,000 homes at the time.