Monday, March 31, 2008 - 2:07 PM CDT

Some Shell employees in Houston will be affected by Royal Dutch Shell plc’s selection of AT&T Inc. as its global communications infrastructure manager.

Shell, based in The Hague, Netherlands, has its United States headquarters in Houston, where 60 employees have been given the opportunity to transfer to San Antonio-based AT&T (NYSE: T), according to Dan Feldstein, spokesman for AT&T. The move will ensure Shell continues to receive network support at its sites.

A total of 560 Shell networking professionals in the Netherlands, Malaysia, the United Kingdom and the United States have been given opportunities to transfer. The Houston employees represent all of Shell’s U.S.-based employees switching companies, Feldstein said.

AT&T’s deal is for five years and is valued at $1.6 billion.

The company will provide managed network services to Shell and its subsidiary companies in more than 100 countries. AT&T will develop wide area and local area networks, voice and Voice over Internet Protocol services, managed security and wireless services to connect 1,500 Shell offices and 150,000 Shell employees.

The telecommunications company also will manage 600 separate third-party contacts with more than 300 Shell vendors worldwide, including contracts with regional telephone companies. AT&T also will manage the cellular services contracts provided by other mobile operations.

http://houston.bizjournals.com/houston/stories/2008/03/31/daily11.html

Monday March 31, 3:35 pm ET
By Chris Baltimore

WASHINGTON (Reuters) - Five U.S. oil company executives set to testify on Capitol Hill on Tuesday about soaring gasoline prices and record industry profits will likely offer a common defense: It’s not our fault.
 
U.S. average pump prices have risen steadily since the beginning of 2008 and recently hit a record above $3.20 a gallon, heaping yet more pressure on a U.S. economy beleaguered by an imploding housing market and recession fears.

Rep. Ed Markey of Massachusetts, a long-time oil industry critic and chairman of the House Select Committee on Energy Independence and Global Warming, will chair the hearing called “Drilling for Answers: Oil Company Profits, Runaway Prices and the Pursuit of Alternatives.”

Executives from the three biggest U.S.-based oil companies — Exxon Mobil Corp (NYSE:XOM - News), Chevron Corp (NYSE:CVX - News), and ConocoPhillips (NYSE:COP - News) — will attend, as well as U.S. representatives of BP Plc (LSE:BP.L - News) and Royal Dutch Shell (LSE:RDSA.L - News).

With heated questions expected from Markey and other Democrats on the panel, oil executives are likely to point to U.S. crude oil prices, which have skyrocketed from below $20 in early 2002 to a record $111.80 a barrel earlier this month.

“Gasoline and diesel prices are being set in what we consider to be a crude-driven market,” said Red Cavaney, president of the American Petroleum Institute, which lobbies on behalf of big U.S. oil companies.

In other words, there is no shortage of refined products like gasoline, heating oil and jet fuel, and U.S. companies have little control over a world market dominated by geopolitical events like supply disruptions in Venezuela, Nigeria and Iraq.

“This is a well-supplied market,” said API chief economist John Felmy, pointing to plentiful U.S. stockpiles of crude oil and gasoline.

According to the U.S. Energy Information Administration, about 70 percent of the February 2008 average pump price of $3.03 a gallon was crude oil, with 17 percent from refining and marketing costs and 13 percent from taxes.

Markey has pointed out that even though Exxon earned a record $40.6 billion in 2007, oil companies have opposed a push by congressional Democrats to strip about $18 billion in tax breaks from big oil companies and put them toward planet-friendly energy alternatives like wind and solar.

The API’s Cavaney said oil company profits actually come in lower than other sectors like pharmaceuticals, and that private U.S. companies rely on their giant scale to compete with state-owned oil companies like Saudi Aramco.

“We continue to hear this idea about we make these massive amounts of dollars of profit,” Cavaney said. “But again, the dollars are large because the companies’ competition is the huge national oil companies,” which control the lion’s share of global supply.

The image of oil executives raising their right hands and swearing to tell the truth about their influence over pump prices is a perennial event in Washington.

The last time U.S. lawmakers called such an expansive oil company hearing was in March 2006, in the upshot of the 2005 Gulf Coast hurricanes.

Industry witnesses at Tuesday’s hearing are: Stephen Simon, senior vice president of Exxon Mobil; Peter Robertson, vice chairman of Chevron; John Lowe, executive vice president of ConocoPhillips; John Hofmeister, president of Shell’s U.S. subsidiary, and Robert Malone, chairman of BP’s U.S. subsidiary.

(Reporting by Chris Baltimore, editing by Matthew Lewis)
 
http://biz.yahoo.com/rb/080331/usa_oil_congress.html?.v=2

By Kelly Fiveash
Monday 31st March 2008 17:31 GMT

Royal Dutch Shell today inked three outsourcing deals – worth $4.2bn over five years – to spin out IT and telecoms operations.

In January, a leaked memo to staff revealed the oil company was in outsourcing talks with EDS, AT&T and T-Systems.

Today, Shell sealed separate agreements with those companies and said most of its 3,200-strong IT workforce will transfer to the service providers.

The contracts kick off on 1 July, and see AT&T scoop up network and telecommunications, T-Systems getting hosting and storage, and EDS tackling end user computing services.

According to Shell, “minimal redundancies” are inevitable, but it has not revealed numbers affected.

In a canned statement, the firm said the decision will deliver “important [but unspecified] financial benefits”.

Last month Shell told UK trade union reps at Unite that it aimed to reduce costs by £250m by outsourcing its global IT infrastructure business.

Shell announced record full-year earnings of £13.9bn in February. ®

http://www.theregister.co.uk/2008/03/31/shell_signs_outsourcing_deals/

By Paul Dobson

March 31 (Bloomberg) — Centrica Plc, Britain’s biggest energy supplier, hired Mark Hanafin from Royal Dutch Shell Plc to replace Jake Ulrich as managing director for the natural-gas production business and European operations.

Ulrich will retire at the end of July after heading the company’s upstream business for 11 years, Windsor, England-based Centrica said today in a statement distributed by BusinessWire.

The company plans to increase the amount of gas it produces to supply consumers in Britain and northwest Europe.

Hanafin is chief executive officer of Shell Energy North America, based in Houston. He has been at Shell for 21 years.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net

Last Updated: March 31, 2008 03:35 EDT

Mon Mar 31, 2008 8:18am EDT

FRANKFURT, March 31 (Reuters) - Deutsche Telekom (DTEGn.DE: Quote, Profile, Research) said on Monday its business client unit T-Systems has won an information technology contract from Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) worth 1 billion euros ($1.58 billion) over five years.

T-Systems, which this month announced an alliance with U.S. IT services provider Cognizant (CTSH.O: Quote, Profile, Research), said the deal was the biggest in its history and would increase revenue from abroad by more than 20 percent.

Last year, T-System had sales of 12 billion euros, of which 2.5 billion euros were generated outside of Germany.

It said it had the option to extend the contract with Shell for global hosting and storage services after five years.

Deutsche Telekom stock was down 2.4 percent at 10.46 euros at 1125 GMT, in line with the DJ Stoxx telecoms index .

Shell signed two more five-year outsourcing deals on Monday, one with U.S. telecoms group AT&T (T.N: Quote, Profile, Research) for $1.6 billion and one with Electronic Data System Corp EDS (EDS.N: Quote, Profile, Research) for $1 billion.

In December, Shell said it wanted to outsource a substantial part of its information technology operations to cut costs, and that it was in talks with three companies.

T-Systems said it will take over the infrastructure and organisation of IT professionals at Shell’s global data centres, including three in the Netherlands and one each in the United States and Malaysia.

It also plans to move its U.S. headquarters to Houston, Texas, from Lisle, Illinois, and make Malaysia a centre for service management, turning the data set-up there into its operational hub for Asia-Pacific.

T-Systems is Deutsche Telekom’s smallest and least profitable unit.

The business provides IT and telecoms services for companies such as carmakers BMW (BMWG.DE: Quote, Profile, Research), Daimler (DAIGn.DE: Quote, Profile, Research) and Volkswagen (VOWG.DE: Quote, Profile, Research), as well as for German federal and municipal governments and European public administrations.

Last March, Deutsche Telekom said it was looking for an international company to buy into T-Systems but, in the course of the year, said it was seeking a partner only for the systems integration part of the business.

(Reporting by Nicola Leske; Editing by David Hulmes)

© Reuters 2008 All rights reserved

http://www.reuters.com/article/marketsNews/idUSL31838820080331?sp=true

Author: Kostis Geropoulos
31 March 2008 - Issue : 775

UK oil giant BP downplayed the recent pressure piling on its Russian joint venture, TNK-BP. “What tension are you referring to? Where have you heard tension?” BP spokesman Toby Odone asked, laughing. The Russian Interior Ministry said the firm had violated immigration law by obtaining business visas instead of work visas for dozens of foreign employees. BP has temporarily withdrawn 148 staff working on secondment at TNK-BP because of visa problems. “They have not been recalled. They were asked not to go to work at TNK-BP until we get their visas.

They do have visas but the process of issuing visas has changed,” Odone told New Europe on March 27, adding that they were trying to get the visa requirements sorted out. He said the visa issue was a technical matter. Earlier last week, the Russian Natural Resources Ministry said it would inspect TNK-BP’s largest oil field Samotlor for environmental violations. “RosPrirodNadzor is going down and doing an inspection every two years,” the BP spokesman said, adding that it is the environmental agency’s responsibility to inspect every field in the country. He noted that the company would wait for RosPrirodNadzor to complete its inspection. “We don’t know anything until they do it,” he said, adding that TNK-BP would cooperate with the authorities.

The environmental inquiry into Samotlor field will be led by Oleg Mitvol, head of RosPrirodNadzor. The announcement of the inspection came after security services raided the TNK-BP and BP offices in Moscow and arrested a TNK-BP employee and his brother for suspected industrial espionage.

The employee, Ilya Zaslavsky, and his brother, were both members of the British Council’s Alumni Club in Moscow. They were accused by the FSB of seeking to obtain classified information from Russian oil companies for the benefit of foreign rivals, The Times reported. Moscow and London have clashed over Britain’s demand that Russia extradite the chief suspect in the fatal poisoning in London of Alexander Litvinenko and Britain’s refusal to hand over Boris Berezovsky and other Kremlin foes for prosecution. Tension escalated earlier this year when Russia forced the closure of two offices of the British Council. The Russian authorities accused the cultural organisation of spying.

Analysts have suggested that the pressure on TNK-BP may be connected with the desire among some Kremlin officials to replace BP’s Russian partners with a state-controlled company, such as Gazprom or Rosneft. BP owns half of the TNK-BP venture. The rest is shared by a consortium of oligarchs, Michael Fridman, Viktor Vekselberg and Len Blavatnik. The Kremlin has already swallowed Russia’s largest major, YUKOS, and sent its boss Mikhail Khodorkovsky to jail. “It is the continuing process for Russians trying to effectively take control of their asset. They still feel that these assets were sold way too cheaply, the deals were too one-sided and they are trying to get them back,” Justin Urquhart Stewart, director of Seven Investment Management in London, told New Europe. “BP doesn’t see that in the slightest issue.

I think they see it as a fair deal. But you can see a consistent issue here of what happened with Shell at Sakhalin.” Urquhart Stewart said BP would be put under further pressure after these events. Although the investigation at Samotlor was described as routine, Mitvol led the inquiry into Shell’s gas development on Sakhalin Island in Eastern Siberia that ultimately led to Shell’s loss of control of the project and the transfer of a majority shareholding to Gazprom. Shell was relentlessly pursued for environmental violations and was threatened by huge fines before transferring control to Gazprom. Mitvol’s attacks on Sakhalin ceased after its transfer to the state-controlled gas giant. At the end of 2006, TNKBP produced 1.7 million barrels of oil per day and had reserves of 7.8 billion barrels – which is equivalent to a large multinational oil firm. Samotlor is one of the world’s largest oilfields and during its peak output in the 1980s, produced a quarter of Russia’s oil.

However, BP spokesman Odone told New Europe that “basically Samotlor is a field in decline,” but BP managed to turn it around and boost production using modern drilling technology. “It is a very old field, it’s not like a new field,” Odone said. “But, it is still producing pretty big volumes.” The Kremlin may have put TNK-BP, Russia’s fourth largest oil producer with profits of USD 6.6 billion in 2006, in its crosshairs. Gazprom Chairman Dmitry Medvedev takes over the country’s presidency from Vladimir Putin, who’ll become prime minister. The TNK-BP case suggests that it will be business as usual. Kremlin business, that is. “It is certainly affecting the investment climate and the fact that Medvedev is coming in, I don’t think it will have too much effect because of course the power will lie increasingly with the new prime minister and what surprise … that will be,” Urquhart Stewart said. 
 
http://www.neurope.eu/articles/84895.php
 

March 31, 2008: 06:47 AM EST

DOW JONES NEWSWIRES

Electronic Data Systems Corp. (EDS) Monday said it signed a five-year, $1 billion information-technology master services agreement with Anglo-Dutch oil giant Royal Dutch Shell PLC (RDSA).

EDS said the deal is one of three IT outsourcing agreements between Shell and three key suppliers, and is expected to deliver a substantial business improvement to Shell over the five-year initial term of the contract.

EDS will manage Shell’s end-user computing services.

Royal Dutch Shell shares rose 1.2% in London.

-Sarah Turner; 415-439-6400; AskNewswires@dowjones.com
  (END) Dow Jones Newswires
  03-31-08 0647ET
  Copyright (c) 2008 Dow Jones & Company, Inc.

http://money.cnn.com/news/newsfeeds/articles/djf500/200803310647DOWJONESDJONLINE000263_FORTUNE5.htm

The Associated Press
Monday, March 31, 2008

AMSTERDAM, Netherlands: Royal Dutch Shell PLC, Europe’s largest oil company, says it will pay AT&T, EDS and T-Systems a combined $4 billion over the next five years to manage its computer and communications systems.

Shell says AT&T Inc. will manage its telecommunications; T-Systems, an arm of Deutsche Telekom AG, will provide “hosting and storage;” and Electronic Data Systems Corp. will provide employee computer services and infrastructure starting in July.

Shell is not specifying Monday how much money will go to each company.

Shell says in a statement it hopes to save money and improve the services by outsourcing them, but does not say how much it hopes to save.

http://www.iht.com/articles/ap/2008/03/31/business/EU-FIN-COM-Netherlands-Shell.php

MIKE STONE/REUTERS FILE PHOTO
Exxon Mobil chair and CEO Rex Tillerson has put his company on top of the corporate world with sound investment decisions. May 30, 2007.
 
Investor-owned oil majors like Exxon will no longer be able to increase their reserves, say analysts, because of new attitudes in oil-producing nations

Mar 31, 2008 04:30 AM
David Olive
Business Columnist

The performance and strategy of Exxon Mobil Corp. is a good place to start in grasping the twilight years of the investor-owned oil sector that has dominated the extraction of petroleum resources since the industry began in the 1850s.

Putting aside the Valdez debacle of 1989, Exxon has been the best-managed of the oil majors.

Exxon has avoided the faked-reserve scandals that have plagued rival Royal Dutch/Shell PLC, the Alaskan pipeline ruptures and fatal refinery explosions that forced out the CEO of BP PLC, and thoughtmore than twice before committing to its multibillion-dollar bets on gargantuan offshore oil-production platforms, heavy-oil projects in Athabasca, and signing production contracts with the state-owned oil agencies that control about 90 per cent of the world’s petroleum reserves. The same state-owned agencies who have an unsettling habit of ripping up those contracts — as in Russia, Venezuela and Kazakhstan, among other countries — to demand a heftier share of output when oil prices skyrocket, as they have in recent years.

As the industry’s most consistently successful player, Exxon’s dilemmas offer a disturbing forecast for a business in decline. For a variety of reasons, but mostly shifts in geopolitics, it’s increasingly easy to imagine a world not too far off in which Exxon and its investor-owned peers have given way to ascendant state-owned resource giants, at least in the “upstream,” or exploration and development part of the industry, traditionally the most lucrative end of the business, compared with “downstream” refining and distribution activities.

Exxon is the world’s largest investor-owned oil firm, and produces more oil than any OPEC nation apart from Saudi Arabia and Iran. On staggering 2007 revenues of $404 billion (U.S.), Exxon posted earnings of $40.6 billion, the biggest annual profit in the history of capitalism. The market capitalization of Exxon, which began life as John D. Rockefeller’s Standard Oil of New Jersey, has more than doubled over the past five years, to half a trillion dollars.

Thus ends the good news.

Exxon’s production dropped 2.4 per cent last year, a fate shared with its biggest investor-owned peers. (Shell’s production slumped 4 per cent.) On the exploration side, Exxon failed to replace 24 per cent of its production with new reserves, its worst “reserve ratio” showing in three years. With reserves increasingly difficult to find, drawing Exxon and its rivals into more costly, remote and politically volatile regions, Exxon has seen its failure rate of exploratory wells searching for commercially viable pools of oil or natural gas rise to 46 per cent, up from 36 per cent in 2006.

Exxon’s production cost per barrel soared 18 per cent last year, following a 13 per cent rise the year before. The company in March committed to a 20 per cent increase in spending on exploration and refinery upgrades, to more than $25 billion, or an industry record of $68 million per day. But that hike will do little more than cover the spiralling cost of everything from drilling rigs to engineers.

At a March 5 conference with analysts in New York, Exxon unveiled an impressive number of new exploration and production projects, a dozen of which are set to begin this year alone. Exxon hopes to bring new fields into production in the Middle East, Africa and Russia by 2012; recently brought a large offshore Angola field into production; and is adding to its network of enormous liquefied natural gas (LNG) operations in Qatar.

But Exxon will be fortunate if its new projects make up for declining production at its aging fields in the North Sea and Alaska.

Not that Rex Tillerson, Exxon’s CEO, is the least bit apologetic about that scenario. The average Fortune 500 CEO who promised investors zero volume growth through 2012 would soon be looking for a new job. But this is the conservative oil business, whose executives recall the $10 per barrel crude of the late 1990s as if it was yesterday. And no oil major has been more disciplined in capital spending than Irving, Texas-based Exxon.

As Tillerson explained to analysts early this month, Exxon doesn’t set a volume target and strive to achieve it, the way Procter & Gamble, Apple Inc. and Toyota Motor Corp. do. Instead, it calculates the likely payoff from a potential project, factoring in setbacks like skilled-labour shortages and soaring rig-crew costs, and places its chips accordingly. Which means passing on potentially high-volume plays vulnerable to Venezuela-type expropriation.

With good reason, BP announced with considerable fanfare the Russian partnership it struck earlier this decade, since it would account for about one-quarter of BP’s total reserves. BP’s share of its flagship Russian project has been repeatedly reduced, ceded to its Russian state-owned partner, following Kremlin accusations against BP of everything from fraud to environmental degradation – charges that mysteriously disappear once BP consents to a lower share of output, only to recur, accompanied by police raids on BP’s Russian offices, when the Putin/Medvedev regime clamours for still more. Exxon was spared the water torture treatment in Venezuela, where the Chavez regime simply expropriated properties once Exxon’s technology had brought them into production.

Given the potential for devastating reversals, Exxon doesn’t see itself on a mission to ensure energy security in North America or elsewhere. The shareholders come first, last and always.

“It really goes back to what is an acceptable investment return for us,” Tillerson told the analysts.

Last year, Exxon spent more money buying back its stock – $36 billion – than on reinvesting in the business. Since replacing his similarly unsentimental predecessor, Lee Raymond, in January of last year, Tillerson, 55, has raised capital spending just 18 per cent against a 75 per cent jump in expenditures on share buybacks.

That gambit increases earnings per share, but obviously doesn’t add a drop of oil or gas to the firm’s reserves in order to sustain the business. Yet Shell and Chevron Corp. also are furiously buying back their stock, at a rate that will see Exxon and Chevron retire all of their stock by about 2024. It comes down to this: buying back the company’s stock is a far more certain bet on increasing investor returns than operating a new deep-water drilling program.

In the past, consolidation has been the industry’s response to declining reserves. Companies simply bought oil on the stock market rather than drilling for it, which accounted for the late-1990s merger wave that brought Amoco and Arco into the BP fold, the merger of Exxon with Mobil Corp., the amalgamation of French giants Total and Elf, and the creation of ConocoPhillips Co., among other combinations. The Canadian oil patch would be especially vulnerable to a future takeover trend: the total 2007 revenues of Calgary’s eight-largest Canadian-owned firms was $97 billion, about 19 per cent of Exxon’s market cap.

But mergers don’t add to global oil supply. The merger rationale was that firms with a more substantial “critical mass” could better afford to undertake ever costlier megaprojects. That notion went out the window when the likes of Exxon Mobil learned that even the world’s largest corporation can be stripped of its assets by the likes of Hugo Chavez. Indeed, all of the “super majors” created in the last merger wave have been forced to surrender production under contracts with producing nations by which those nations gain a larger share of output as crude prices increase.

Example: Chevron Corp. was producing almost 2.7 million barrels of oil a day in 2002 when it acquired oil giant Texaco. Last year, Chevron’s daily production was 2.6 million barrels a day, making a hash of Chevron’s 2002 expectation of increasing the combined firms’ volume by 3 per cent by 2006. Like its rivals, Chevron lost output under production-sharing contracts with oil-producing nations, and was hit with an unfavourable contract revision dictated by Venezuela.

Which suggests that the petroleum industry of the future will belong to the state-owned enterprises. After working in some cases for decades with the investor-owned giants, state oil firms have accumulated enough of the required technology to forsake joint ventures and go it alone. They have every incentive to do so in those many oil-producing nations in which oil and gas are the sole, or largest, source of export revenue, no longer to be shared with investors in companies based in London and Houston.

It’s beginning to look like the investor-owned sector’s long-term plan is to phase itself out of business, becoming a glorified annuity that returns outsized dividends to a dwindling number of investors from a dwindling reserve base. As early as 2001, oil analyst Charles Maxwell of Weeden & Co. of Greenwich, Conn., told Bloomberg News, the investor-owned oil majors will no longer be able to increase their production.

“They’ll be in liquidation,” he said.

An apt expression for an industry running out of juice.

NEW OIL GIANTS

State oil firms are set to dominate the industry in years to come:

China National Offshore Oil

China Petroleum & Chemical

OJSC Gazprom (Russia)

OAO Lukoil (Russia)

OAO Rosneft Oil Co. (Russia)

Oil & Natural Gas Corp. (India)

PetroChina Co. Ltd.

Petrüleo Brasileiro (Petrobras)

Petrüleos Mexicanos (Pemex)

Petrüleos de Venezuela

Saudi Arabian Oil Company

Statoil ASA (Norway)

David Olive is a business columnist with the Star. He can be reached at dolive@thestar.ca.

http://www.thestar.com/Business/article/407511

By Neil Partrick
Sunday, March 30, 2008

DUBAI: According to BP’s latest “Statistical Review of World Energy,” Iran and Qatar sit on 30 percent of the world’s total natural gas reserves.

Yet within the Gulf, the ability to meet the growing local demand for natural gas is being frustrated by underdeveloped supply mechanisms and limited regional cooperation.

The state-dominated Qatari gas provider, QatarGas, aims to be the world’s largest producer of liquefied natural gas, LNG, by 2010. But concentrating on securing the most favorable terms for its gas exports internationally, it has given top priority to supplying Europe, the United States and Asia, rather than its Gulf neighbors.

In 2006 a joint venture between Qatar and Exxon Mobil awarded a $4 billion contract to Japanese and French companies to build a liquefaction plant to supply the U.S. market.

Meanwhile, although there are plans for Qatar to supply a proposed inter-Gulf natural gas network, this is limited to just one undersea pipeline, connecting to the United Arab Emirates.

This so-called Dolphin pipeline, inaugurated in 2005 and majority-owned by the United Arab Emirates, pipes 2 billion cubic feet, or 57 million cubic meters, of natural gas a day from Qatar to Abu Dhabi, one of the seven emirates of the United Arab Emirates. Tenders have recently been sought for an extension of the pipeline to Al Fujayrah, another emirate, while Oman, is also supposed to be linked to the Dolphin network next year.

But Dolphin, while adhering to its contractual obligations, is supplying gas at levels far below the emirates’ fast-growing needs, and a moratorium on additional extraction from Qatar’s huge North Field has been extended to at least 2011, preventing any increase in volumes from passing through the Dolphin network until at least that date.

Projections of future demand indicate that the natural gas needs of the emirates will double by 2015 from 5 billion cubic feet a day now, and could reach 15 billion cubic feet a day by 2020, Khalid al-Awadi, gas operations manager at Emirates General Petroleum, was quoted as saying last month by The Middle East Economic Survey, a weekly publication.

The emirates themselves produce gas in volumes comparable to Qatar, but much of the output is associated with oil production and is therefore constrained by oil output quotas imposed by the Organization of Petroleum Exporting Countries. If oil prices weaken, the Organization of Petroleum Exporting Countries could agree to lower quotas, which would automatically reduce the emirates’ natural gas output.

Unable to gain access to gas from Qatar or Iran, the northern emirates of Ras al Khaymah and Al Fujayrah have