Economic Update

Published 22 Jul 2010

News of a new map issued by the UAE authorities has reignited debate over the contentious issue of the country’s borders. The Information and Culture Ministry’s new yearbook’s visual display of UAE territory includes what some consider Saudi territory, and highlights the lack of resolution of a longstanding dispute.

Some Gulf watchers are seeing this move as the latest step in a campaign by the Abu Dhabi government to renegotiate a 1974 border agreement with Riyadh, cutting the Emirates off from nearby Qatar.

The Abu Dhabi authorities also have a second territorial issue with the Saudis – the giant al-Shaybah oilfield, which straddles the UAE-Saudi border in the Empty Quarter. The field is widely believed to be one of the world’s largest onshore deposits, with current estimated proven reserves of 15.7bn barrels of oil, and perhaps 0.7 trillion cu metres of associated gas – almost equivalent to Oman’s total gas reserves.

The dispute has deep historical roots, reaching back to the 19th century and Saudi occupation in the 1950s of three Omani villages at the oasis of Buraimi.

At that time, a Saudi force occupied the oasis and declared it Saudi territory. The “Buraimi Dispute” made world headlines, eventually resulting in the defeat of the Saudis in 1955. Buraimi is now in Oman, although Saudi Arabia maintained a claim on it up until the Jeddah Agreement of August 21, 1974.

The most common view of this agreement was that a deal was struck under which in return for signing off on Buraimi, the Saudi’s were given a 25km-long strip of land that had previously linked the Emirates to Qatar, up at the western end of the UAE. The upshot was that the Saudis ended up with a channel to the sea – and Qatar ended up with an exclusive land frontier with Saudi Arabia.

Prior to this agreement, Saudi Arabia had not recognised the UAE, while it had also claimed all the key onshore oilfields within the Emirates’ territory. The UAE’s ruler, President Sheikh Zayid bin Sultan Al Nahyan, saw it as vital to get recognition for his country out of the agreement.

Thus things stood until recently. Not long after the death of Sheikh Zayid, the dispute reignited, triggered this time by Emirati and Qatari plans to build a sea causeway connecting their two nations.

The causeway would cross the shallow waters of the Gulf – in front of Saudi’s strip of land, which, Riyadh argues, breaks laws on territorial waters.

Saudi Arabia then informed the UAE that it also intended to construct a seaport and other maritime facilities on the land strip.

The UAE strongly rejected this plan and denied that Saudi Arabia had any maritime rights in the waters off the territory. This goes back to an interpretation of the Jeddah Agreement, which Abu Dhabi argues does not give Riyadh any offshore rights.

Meanwhile, entangled in all this too is the oil field issue. The Jeddah Agreement also stipulates that as far as the al-Shaybah oil field is concerned, the country in which 80% of the field is located has the right to develop and fully benefit from its oil production.

This has been the practice up to now, with Saudi Arabia able to claim more than the lion’s share of the field’s territory, and thus gain the exclusive rights.

However, a readjustment of borders as envisaged by the UAE’s latest map would switch this winner-takes-all exploitation right over to the Emirates, Khaleej Times reported on January 8. It would also change boundaries within the Empty Quarter substantially.

In an effort to bring a diplomatic solution to the dispute, the Saudi interior minister, Prince Naif bin Abdulaziz, visited Abu Dhabi last June to hold talks.

The prince met with Deputy Prime Minister and Minister of State for Foreign Affairs Sheikh Hamdan bin Zayed Al Nahyan, who had been tasked with handling the border issue.

The talks however, proved fruitless, although Prince Naif tried to suggest agreement had in fact been reached. Sheikh Hamdan had then been due to visit Riyadh a week after the Abu Dhabi talks, but the trip failed to materialise. The Sheikh also pointed out that the UAE had been calling for changes to the 1974 agreement since soon after it had been made.

How the Saudis will react to the latest round of the debate remains to be seen, though the UAE appears determined to press its claims. While no one is suggesting the dispute might become dangerously heated, it certainly may require some hard thinking by both parties, as well as by other members of the Gulf Cooperation Council.