Importance Of Innovation In The Petroleum Industry In UAE

Purpose of the Study

Over 80 percent of the world’s energy needs are provided by coal, oil and gas. The core products themselves were never been challenged until now (Saini 2017). The pressure of reducing the carbon emissions is putting the fossil fuel industry into jeopardy (Saini 2017). In just 8 years the economic value of the largest power companies has halved (Lee, Speight and Loyalka 2014). The agreement of 195 countries to minimise the use of fossil fuels and to become more dependent on the renewable energy has been a huge blow to the states like UAE and Saudi Arabia (Goldenberg et al. 2015). The Paris Climate summit ensured that the developed and the developing economies will bank on renewable energy and will try to reduce the use of fossil fuels (Goldenberg et al. 2015). However, many of the oil companies are banking on new methods to clean up an old process in order to become more carbon efficient in terms of oil production (Lee, Speight and Loyalka 2014). The Norwegian oil companies have developed technologies in order to separate petroleum and carbon-dioxide and pump it to the underground (Lee, Speight and Loyalka 2014).   

Erstwhile, in 2011 the USA announced the discovery of a new method of acquiring oil and gas from the subterranean rocks, called fracking (Song and Oh 2015). The United States of America started using this method extensively in there petroleum and gas industry and announced that they will be able to produce more oil than their requirement from 2020 (Song and Oh 2015). As the United States was the largest procurer of petroleum from OPEC (Organization of the Petroleum Exporting Countries), it was a huge blow for the the economies in the Middle East (Griffin and Teece 2016). However, Japan uses the best technology for cheaper petroleum production (Fujii et al. 2015). The constant decrease in the oil prices has forced these countries to cut down production and redevelop the taxation which has created havoc problems in various countries (Griffin and Teece 2016). The oil prices in the countries like UAE and Saudi Arabia has considerably increased and has created havoc hue and cry among the public (Griffin and Teece 2016).

Petroleum industry includes the production firms of natural gas, crude oil distillations and other refinery products (Radnejad, Vredenburg and Woiceshyn 2017). In the last century there have been considerable innovations in the oil and petroleum industry. There has been a process of constant innovation from the year 1913. Before the year 1913, Distillation method was used in order to acquire oil. Since 1913 until 1966 Thermal Cracking method was extensively used in the oil production in the respective industries (Radnejad, Vredenburg, H. and Woiceshyn 2017). Thermal Cracking method had two variant types; one was Thermal reforming which was used until 1956 and another was Catalytic Cracking which was in use in the year 1936. However, in this age of clean and renewable energy production the requirement of innovating the technology have increased. Innovation is not only become important for the development of the P&P industry in UAE but is also considered as its solo tool for survival.

Research Questions

The purpose of the study is to try and understand the importance of innovation in the Petroleum industry and assess the available resources of innovation for the Petroleum industry in UAE (Abu-Eishah. and Mohammad 2016).  The research would also emphasise on the impact of innovation on the world oil trade and UAE’s competitive strength to compete with all the other major oil producers (OPEC 2017). The research would also discuss about the future impact of this innovation on the working class of the Middle East nation (OPEC 2017). As the economy of UAE is largely dependent on the survival of the Petroleum industry, it is important for these industries in the country to develop innovative technology for the environmental and technical reasons (OPEC 2017).

• What is the requirement of innovation in the petroleum industry of UAE?
• What are the resources by which it can achieve this innovation in the petroleum industry of UAE?
• What are the challenges that the petroleum industry of UAE face in order to compete with the other oil producers in the world market?
• What will be the impact of this innovation on the working class of UAE?
• What can be recommended to UAE in order to stabilise the petroleum industry?  

`One of the earliest researches on carbon emission was done by Tyndall in 1861 (Fleming 1850-1950). Tyndall was the first scientist to find out the radioactive properties of the gasses (Fleming 1850-1950). Another scientist Arrhenius stated in his article about the heinous effects of the increase of carbon dioxide in the atmosphere (Fleming 1850-1950). Arrhenius stated that the increase of carbon dioxide in the atmosphere can result into the increase in the temperature (Fleming 1850-1950). A.G Hognorn constructed a carbon cycle to estimate which became helpful to understand the carbon emissions (Poulter et al. 2014). In the present circumstances this theories are should be analysed properly to understand the situation of the petroleum industry in UAE. The carbon emission has become one of the major problems for global warming (Poulter et al. 2014). The decrease in the fossil fuels is also causing severe effects on the earth crust (Poulter et al. 2014). The constant over exploitation of the oil resources has caused several geological problems in the earth crust (Poulter et al. 2014).  

There has been a dark history of labours in UAE. The migrant labours have been the core of UAE’s workforce. The long working hours and unsuitable working conditions of the Middle East was a norm in the early seventies and eighties (Knights and Willmott 2016). However, the scenario changed a bit later. In the modern society, Marx divides the entire society into two halved, ‘haves’ and ‘have-nots’, the capitalists and the proletariats (Knights and Willmott 2016). Marx states that the employers are supremely powerful and have the power to hire and fire every one and anyone. Later in the first half of the 20^th century, Ford also includes such principles of easy hiring and firing of labours (Barendse 2015). Historically, it has been observed that innovation of technology has always caused job cuts and unemployment of employees who cannot adopt (Makasheva et al. 2015). For example in the 18^th century, there was a industrial boom in United Kingdom and various technologies old technologies like handloom was replaced by power loom. This caused an enormous unemployment in the England. The machineries and computer technology also created havoc job cuts in the United States and around world. Hence such instances of job cuts have been common around the world.  J. Rachels states in his theory of ‘Created Animals’ that Capitalism is a theory in which exists by the principle of ‘survival of the fittest’ (Barendse 2015). Therefore, the innovation of technology can cause havoc problems for the workforce of UAE in the Petroleum industry (Barendse 2015).

Theoretical Background

Petrobras, one of the state owned oil companies in the Brazilian Industry has utilised innovation tactfully to increase production. Petrobras adopted Floating Production System in the 1970’s in order to explore oil reserves in Campos basin (Redden and Strickland 2017). The network of suppliers of equipment and services (NSES) utilised by the company is credible for its present success (Redden and Strickland, 2017). The development of NSES has been instrumental in transforming the production system of the production company in Brazil (Redden and Strickland, 2017). This strategy of technology has opened a big window for innovation opportunities in the oil and gas industry (Redden and Strickland 2017).

In the Norwegian petroleum and gas industry have stated that they have faced challenges like subsurface imaging, molecular manipulation, in rise of hydrocarbon recovery and in carbon capture (Tavassoli 2015). The technologies like 3D/4D visualisation for acquiring geological information, horizontal drilling and underwater production are reportedly used by the Norwegian companies (Tavassoli 2015). These Scandinavian petroleum industries extensively use computing, computer graphics, visual interpretations, voxels, visual modelling and HPV to acquire proper geological data about the location of the oil reserves. This information is later utilised in proper drilling (Tavassoli 2015). This industry uses adwanced wells, horizontal drilling and sidetrack drilling in order to acquire petroleum from the earth crust (Noreng 2016). Companies like Statoil asa and Telenor asa extensively uses technologies for underwater production of petroleum (Noreng 2016). These technologies are advanced and updated which are not helps in the increase in the production (Tavassoli 2015). However, the better form of dimensional visualisation is still to be used in UAE. UAE faces problems in increasing the production of oil. The increase of production in oil production is negligible in compared to the USA, Russia and Scandinavian companies.

Methodology

In order to conduct the research, secondary is data collection process has been chosen. Secondary data regarding the statistics of petroleum industry of UAE, productivity of the sector over the years and the rate of innovation are to be collected. Secondary survey is required for the literature review. It is required to identify the dependent and independent variables before collecting data (Silverman 2016). The entire method of the research is described below.

  Qualitative research approach has been chosen for the study. Numerical data have been used to analyse the nature of dependent and independent variables. Analytical strategies have been used for this study. Dependent variable for this study is impact on growth of the petroleum industry. Various types of innovation such as production innovation and process innovation are the two independent factors taken for this study. Qualitative study in this paper has been conducted using own analytical skill of the author based the factual data.

Innovation in Petrobras

Secondary sources used in this study are online research paper, literatures, market trend, reasons for fluctuation of oil prices in the international market and role of OPEC country. Due to time constraint, only secondary data collection procedure has been followed. Critical analysis process has been followed with descriptive study. As specific data on the independent variables are difficult to collect, qualitative analysis is appropriate to analysis them (Bryman 2015). The author gets flexibility in data collection and analysis method. Interpretivism philosophy has been followed in this research. In the view of Petty, Thomson and Stew (2012), interpretivism philosophy is applied to use the knowledge of reality and progresses with the method of inquiry. Individual interpretation has been given priority in the report.

This research has started using the knowledge of reality, national and international level data. The research questions are designed based on experiences from literature review section. As the research is concerned with the innovation in the petroleum industry, research has started with findings on different types of innovation available for the petroleum industry in the global economy. Innovation can be brought in both production and process. As US is an important competitors for the OPEC countries, this research paper has examined what types of innovation are applied by US petroleum industry and if better technology is available to apply in OPEC countries (Norman and Verganti 2014). As petroleum production is the main source of income of the OPEC countries including UAE, innovation in this industry may give significant competitive advantage in global market. Impact of innovation on the GDP of the country has been taken as a factor in the analysis. Innovation has both benefits and costs. This paper has critically examined the possible effect of innovation. This report has derived conclusions on the required resources and time needed for the research and development of the new technologies in the petroleum industry of UAE. The paper has examined different types of innovation and their impact and recommended the innovation type, which would be most effective for UAE.

United Arab Emirates is one of the major oil producers and has been part of OPEC since 1967 (OPEC 2017). It is one of the earliest members of OPEC and has been an active member of the organisation since its membership (OPEC 2017). About 40 percent of UAE’s GDP is predominantly dependent on the domestic petroleum industry (OPEC 2017). UAE owns enormous crude oil reserves. The total net worth of Crude oil reserves in UAE is about 6 thousand billion USD. However, the refinery capacity of UAE is limited to 1,124 barrel per calendar day (OPEC 2017). The demand of ail is aggregated to be about 800 barrels per day and the exports of the petroleum products is about 1000 barrels per day (OPEC 2017). The website of OPEC reports that UAE has emerged as an economic power by its oil and petroleum industries.  However, the recent problems in the oil market have a major impact on the economy of the country. According to Forbes, the discovery of oil played a humongous role in the transformation of the economy of this small gulf state (Forbes.com 2017). Moreover, UAE has always believed in free trade policies. It has established itself into a global hub of free trade zones and an economy of tremendous job creations (Forbes.com 2017). However, the recent downfall in the prices of oil and natural gas has caused severe problems for the migrant labourers. Ninety percent of the workforce in UAE comprises of labourers from Pakistan, Bangladesh and India. Major share of these three economies also depends on the economy of UAE (Forbes.com 2017). Therefore, problems in the UAE are causing severe effects in the subcontinent as well. In the 20^th and in the first decade of the 21^st century there has been an enormous rise in the oil prices. The rise of the oil prices is basically dependent on importance of oil in an economy, monopoly positions and geopolitical gains from it. However, the recent downfall of oil prices has caused an alarming situation in the Middle East. Erstwhile, in the middle of this crisis, the Paris Climate Agreement of 2015 has sealed the unfortunate future of fossil fuel industries around the world (Goldenberg et al. 2015). The urgency for the innovation in oil and gas industry is understood by the activities of the major Norwegian and Russian oil companies, who are trying new methods of cleaning up the fossil fuel for lesser carbon emission and limiting the global warming (Goldenberg et al. 2015).

Innovation in Norwegian Petroleum Industry

According to a report by Bill Tucker in the Forbes magazine, there is an emergent crisis in the oil and gas industry (Forbes.com 2017). Tucker states that there is an urgent requirement for innovation and technology in order to restrict carbon emission and pollution caused by it (Forbes.com 2017). Tucker points out a company in the United States which has been growing up to 20 percent despite the horrendous situation in the oil and petroleum industry (Forbes.com 2017). Tucker states that this was possible for certain technological use (Forbes.com 2017). Ground Metrics, a company in San Diego is using a unique electromagnetic technology in order to detect and drill the unfound pockets fossil fuel (Forbes.com 2017). They have increased their production without investing extra bucks in labour or area of production (Forbes.com 2017). They chose the technological innovation in order to achieve success. An MIT technological report has emphasised on the fact that the innovation in the oil and gas industry is transforming the entire scenario and is ensuring future success for the industry (Forbes.com 2017). This highly scientific paper has discussed about use of 3D seismic technology in the P&P industries (Forbes.com 2017). The requirement of clean technology has considerably risen into importance in the last decade (Wentling 2015). Hence, there is no other option for the P&P industry of UAE to embrace these technologies to stabilise their largest industry (Wentling 2015). One of the leading media houses of the United Kingdom, the Telegraph has reported the significance of innovation in UAE. In a report by Elizabeth Wentling, innovation is the real catalyst in the development of UAE. Mohammed bin Rashid Al Maktoum, the ruler of Dubai announced the significant steps which will be taken for the scientific and technological sectors in order to upgrade the economic situation in UAE (Wentling 2015). In the 40^th National day of UAE, the Prime Minister announced that the country is considering major investments in the fields of petroleum industry to develop better technology and scientific methods in cleaning up the energy (Wentling 2015).  

 The requirement of the innovation in the petroleum industry is also important because of the havoc environmental problems it has been causing (Uae-embassy.org 2017). UAE is the seventh largest producer of petroleum in the world. Its crude oil production has unfortunately caused high carbon emission and pollution (Uae-embassy.org 2017). This has caused enormous environmental damage. According to the website of UAE embassy, the state is trying to limit the carbon emission by increasing its dependency on the natural gas and other renewable energy resources (Uae-embassy.org 2017). According to a leading daily in the country UAE has recently opened up about the amount of annual carbon emissions in the country (Todorova 2015). The UAE establishment have revealed that about 199.65 million tonnes of green house gasses along with Carbon dioxide is released in the year 2013 (Todorova 2015). The ministry has declared that about 33 percent of the emissions are generated for the cause of creating electricity (Todorova 2015). Besides CO2 emissions other dangerous gasses like Methane and Nitrogen oxides have created havoc problems in the country (Todorova 2015). UAE has already started investing in the nuclear energy and other forms of clean energy (Todorova 2015). However, they still seem to be reluctant in utilising these funds in the technological innovation in the petroleum industry (Todorova 2015).

 

Figure 1 (Aloulou 2015)

According to a leading research, the oil and gas industry around the world is considering vital changes in technology and innovation in order to develop the production quality and quantity (Opec.org. 2015). In a presentation by OPEC, it states that there has been a constant innovation which has resulted into humongous increase in production (Opec.org. 2015). In the 1960’s the production of oil was restricted to 21 million barrels per day (Opec.org. 2015). However, at present this has increased to more than 75 million barrels per day (Opec.org. 2015). The information technology has also helped in supply and acquirement of more oil at a better rate (Opec.org. 2015). According to a leading research report, less than half of the oil and petroleum industries in the world and even less than half of the oil and petroleum industries in UAE are developing innovative strategy in this time of crisis (Makasheva et al. 2015). Most of these industries do not even find these strategies important enough to be utilised in UAE. This is the major concern for the environmental and economic problems in the Middle East. However, innovations include the all kinds of subjects including culture, leadership, elevating collaboration and elaboration of plans for the future.  The oil industry requires enhancement in network, process, profit model, product system, structure, service, brand, channel and right process of engaging customers. The oil and petroleum industry of UAE should learn from the developmental work done in other sectors like defence and Security systems. The United States and Canada have developed specific departments for the innovation in the oil and petroleum industries (Makasheva et al. 2015). These departments have taken instrumental steps in separating titanium and zircon from oil. Refineries in these countries have been instrumental in the considerable decrease in the amount of carbon emission (Makasheva et al. 2015). The Petroleum companies should try to acquire the lighter machineries in acquiring oil (Makasheva et al. 2015). The security and safety issues of the workers are also properly kept in mind (Makasheva et al. 2015). To innovate the entire industry of petroleum in UAE, the industries should try and learn from their western counterparts (Makasheva et al. 2015). They should either try to develop new technologies and unique working objectives or they should import ideas and technology to boost the sector (Makasheva et al. 2015). The use of 3D and 4D technologies can be a real resource to the oil and gas industry. These visualisation technologies cut off the production cost and helps in increasing the production of a company (Robbins 2013). The petroleum firms of UAE should develop certain methods used by the west in order to achieve the success like the companies in the North Sea and the United States (Robbins 2013). One of the experts on oil and petroleum, K Robbins states that there is a requirement of horizontal drilling, subsea production, better networking facilities, deepwater systems and better technologies like fracking in order to do well (Robbins 2013). The UAE should depend on these technologies in order to achieve the success which the Norwegian companies have achieved (Robbins 2013).

According to Sharpe and Schroeder, the political situation of UAE makes innovation in the petroleum industry challenging (Ross 2016). A lot of scholars believe that the innovation in technology in petroleum industry can have negative impacts on the working class of the UAE (Ross 2016). However, 90 percent of the workforce of UAE is migrants from Pakistan, India and Bangladesh (Ross 2016). Therefore, the introduction of technology innovation can be an easier decision for the establishment. The decision of innovation will affect into further job cuts and it will pressurise the economies of subcontinent than to UAE. In the recent years, UAE has observed a large number of job cuts due to the decrease of oil prices in the world market (Forbes.com 2017). The further job cuts and technology innovation will help the industries of UAE to compete with the international corporations (Forbes.com 2017).  A report of Martha Alves of Forbes states that the oil industry in the Middle East has never shown their interest in technology innovation (Aviles 2014). These production firms were busier in making money out of the sweat and blood of the labours (Aviles 2014).  However, Alves advocates change as it is an utmost requirement of the industry (Aviles 2014).

UAE establishment understands the importance of the stabilization of the petroleum industry (Jimenez et al. 2016). However, major stakeholders in the UAE establishment and the Petroleum industry is still waiting for the increase in the oil prices in order to move back to the earlier situation (Jimenez et al. 2016). The technological and structural innovation is a must for the petroleum industry according to various experts (Jimenez et al. 2016). On the other hand the Emirati Energy Minister Suhail al-Mazrouei states that they are looking forward to freeze the oil output levels (Jimenez et al. 2016). According to this daily, Mazroei believes that the stabilization of prices is the only way to save the petroleum industry (Jimenez et al. 2016). According to a report by Heriot Watt University, petroleum industry requires programs on different aspects to do well (Radnejad and Vredenburg 2015). Firstly, it requires technical innovation; secondly, it requires Business developers who are innovative; thirdly, managers should try to collaborate with the employees with his leadership skills and lastly, it should recruit new qualified people who can change the course of the firm (Radnejad and Vredenburg 2015).  According to a report by Inman Mason, UAE is looking forward to shift its base from fossil fuel to renewable energy. UAE has heavily invested on the renewable sources of energy in the last two years (Inman et al. 2016). They have invested in nuclear energy and solar energy in order to push down their oil consumption and restore the situation of their economy (Inman et al. 2016). However, the truth lies in the fact that even today huge economies like India and China are largely dependent on the oil from the Middle East (Inman et al. 2016). The experts have recommended the import of certain technology in order to stabilize the oil industry in UAE (Inman et al. 2016).

 

Figure 2 (Songolzadeh et al. 2014)

 The technologies like Seismic Source technology and Fracking should be extensively used. The establishment and the public enterprises should come to a situation in order to establish the research and technological fields of the company (Inman et al. 2016). The technological innovation is the sector in which UAE should invest on. According to Jamil and  Farzana Ahmad, there is an urgent requirement for innovation of  technologies in order to limit the carbon emission (Inman et al. 2016). This report states that the UAE government should try to employ more workers in the work of separating Nitrous oxide, carbon dioxide, methane, Perfluorocarbons and hydrofluorocarbons from petroleum (Inman et al. 2016). The Norwegian petroleum industries are prime example of such instances (Songolzadeh et al. 2014). Among the various methods of separating Carbon dioxide from petroleum, methods like Absorption, Adsorption, Cryogenic and Membrane can be used. These methods are the most important methods of purifying petroleum from carbon dioxide (Songolzadeh et al. 2014). These methods should not only be used to purify the petroleum but also to push Carbon dioxide into the underground (Songolzadeh et al. 2014).

 

Figure 3 (Songolzadeh et al. 2014)

Research Gaps

This research has been conducted with the help of authentic resources, theories and information. This information is collected from news journals, earlier research works and theories written by experts. However, the only limitation to this work is perhaps the absence of primary sources. The primary sources can provide a definite insight about the problems which the Petroleum industries are facing (Merriam and Tisdell 2015). Direct information about the situation of the workforce in UAE could have been instrumental in understanding the situation of the industry in holistic way.  The current situation of the UAE could have been assessed properly if a direct sample survey could have been organised. However, the process would have become an elongated one and would have affected the entire research pattern. The information about the technology used in Scandinavian countries, the French and United States could have been utilised in this research properly with the help of the officials who work in the petroleum industry (Galliano, Magrini, and Triboulet 2015). The primary sources are also useful in understanding the insights which are not documented and used in other documents. However, this research basically deals with the requirement of innovation of technology which is required in the petroleum industry of UAE and the impact it will have on the labour force. The research states that there will be enormous problems because the innovation on carbon emission requires a lot of investment (Radnejad, Vredenburg and Woiceshyn 2017). The limitation of the research lies on the fact that most of these facts are on future developments which requires complex calculations to establish facts. These direct calculations are not used in the project. Rather, the research has been dependable on the experts and scholars in order to emphasise the problem in the research.

 The oil & gas sector has always revolved around finding improved technologies, which could help the industry extract more oils. Saudi Arabia and the other Middle East countries had dominated the oil sector for long until the United States of America and Russia had dethroned them. Technological advancement was one such weapon that helped the United States of America taking over the Middle East countries (Hassani, Silva and Al Kaabi 2017). One of such technologies is Fracking that has helped the United States of America gaining more on the O&G industry. Interestingly, the United States of America has mastered such a technology, which is yet to be considered in the Middle East countries such as in Dubai. The Fracking technology is fewer prevalent in UAE (Simpson 2014).

The economical structure of the gas industry in the United Arab Emirates is not capable to take the full benefits of the technology. In addition to this, the O&G governance such as exploration rights are centralized. The national companies have monopoly in the country. The low prices of oils and the monopoly of the national oil companies have contributed in the reducing performance of the oil industry. Until these policies change, the super solid technology as if Fracking would not be highly practiced (Mills 2017).

The ignorance has resulted in a reducing performance of the oil industry, which has provided other nations to occupy the gaps created. Nevertheless, the United States of America is now the richest country in terms of oil production. They have dethroned the Middle East country from the number one position. Interestingly, the same Fracking technology, which is highly missing in the gas sector of UAE, has benefitted the United States of America immensely (Weber, Burnett and Xiarchos 2014). The technology has helped U.S. producing more than half of the oil output than from any other means. The Fracking technology has helped the United States of America in expanding its global dominion in the oil production like never before (Wang and Krupnick 2013). On other hand, the Middle East countries are facing stiff challenges to get new projects mainly because of reduced oil pricing and its consequences. They have no new projects except the United Arab Emirates. This is why a major portion of the Middle East experiencing numerous job cuts (Oluwatobi 2015). 

The implementation of the Fracking technology is very difficult indeed. This is because the United Arab Emirates have centralized policies for the oil sector. The government has reduced the pricing of oil. In addition to this, the exploration of oil has controlled by a monopoly power in the country. The national oil companies have the monopoly and they do take care of the exploration decisions. The implementation of the technology is only viable to the UAE if it considers a change in the exploration decision-making system (Bell 2012). The low costs of oil are another problem, which is hitting the economical adaptation of the Fracking technology (Kubursi 2015). The implementation of the technology would certainly boost the exploration of more oil in the country. It is very necessary to be innovative as it provides a competitive advantage in the highly incrementing competition in the O&G sector (Pilevari, Shahriari and Kamalian 2015).

 The petroleum industry ever since its establishments has revolved around innovative technologies as their answer to higher exploration of oil and the reduction of CO2 emission. They have achieved huge success in the exploration of oil; however, they are yet to find answer for the CO2 emission. One summit that held in the year 2015 known as Parris Climate Change Summit did affect huge on the oil industries at the global level. The pact was signed by 196 countries and because of which different countries started shifting their concentration towards the renewable energy. The shifting of concentration towards renewable energy then became one of the possible reasons behind the reducing prices of oils. Another reason was the richness of oils reservoirs in some USA, Canada and Russia. USA in particular did find significant oil reservoirs, which also helped reduce their dependency on the Middle East countries for oil. These reservoirs did actually help America offer reduced oil pricing to the global world. The reduced oil pricing did affect badly the Middle East countries. They had to reduce the pricing of oil as well. The reduction of oil pricing did become responsible to a less advanced movement towards the industrial development. This affected the oil sector in the UAE. The country is suffering of centralized system of pricing headed by the local government of UAE. In addition to this, the countries face significant challenge of exploration monopoly, which is headed by the national oil companies. These two factors are resisting the flourishing of Fracking technology in UAE. Nevertheless, Fracking technology has proved its worth for the United States of America.

These are not just the stoppages of problems for the United Arab Emirates. In addition to the above-mentioned problems, the country also misses on the innovativeness in the technology. On contrary to the fact, the United States of America spends huge amount in finding newest innovative technologies that could enhance their capabilities. This is because of their innovative thinking to prosper in the oil sector; they are continually deploying new thoughts to get the best out of the sector. The Fracking technology has helped the country produce more than double of its actual oil production. The domination of U.S. in the oil sector has affected the supremacy of the Middle East countries. The findings of different oil reservoirs in the United States of America have helped the country offer reduced pricing for oil. Consequently, Middle East countries such as UAE have to consider the reduced pricing of oil as well. This has reduced their capacity to take full benefits of the Fracking technology. The implementation of the Fracking technology is only possible if the country gets over the dilemma of monopoly in the exploration works. Nevertheless, the O&G sector needs an utmost support of innovative technologies needed to have a competitive edge in the market.

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