Spotlight on Oil and Gas in Sharjah
“Allah gave us this gift to preserve it and use it for good, justice, progress and prosperity, and I promise to safe-guard it and only use it in your best interest based on sound scientific grounds so that rights are distributed equally to whomever is entitled. I emphasize that this gift is your right as well as that of anyone in need in the United Arab Emirates. Sharjah will be a main pillar of progress Under the leadership of Shaikh Sultan Bin Mohamad Al Qasimi -Ruler of Sharjah ”.
Historic Glimpses
The Emirate’s leadership sought to explore oil and gas over half a century ago. Despite its difficult and sometimes frustrating beginnings, the hard work and perseverance – with God’s assistance – paid off in the end.
Oil and gas discovery in the Emirate went through several stages:
Phase One…Difficult Beginnings
Early in 1937, the Petroleum Concessions Company received the first concession for oil exploration in Sharjah. Drilling began in 1940 when the first test well (Juwaiza 1) was drilled.
In 1958, Petroleum Development (Trucial Coast) Ltd), a branch of Iraq Petroleum Company drilled a well in Sharjah but did not continue its operations and relinquished its concession in 1961.
In 1962, US John W. Nikon Independent in alliance with US Union and Pure Group were awarded the right to explore all land and sea territories in Sharjah. The first company drilled four test wells, two offshore and two onshore. Although oil was discovered in a test well 27 km from Sharjah, the company announced that the discovered quantity was not of commercial scale and abandoned its exploration and activities. It was later followed by the second company – Union and Pure Group – which also relinquished its concession rights.
In January of 1969, Shell Oil solely received concession rights to explore for oil in an area of 2,190 square kilometers onshore. It received a second concession in partnership with Baumann Boschmer West Germany to explore oil in two areas; one 286 square kilometers onshore and the other 1,199 square kilometers in the area located in the Gulf of Oman. However, neither company was able to achieve any tangible progress other than two test wells that came up dry. As such, they relinquished their concessions.
In December 1969, US Buttes Gas and Oil Co. of Oakland California received a concession to explore for oil in Sharjah along the offshore area on the Western coast of the Emirate. This agreement granted Buttes full rights to explore the entire continental shelf of Sharjah including its islands and territorial waters. Oil exploration and drilling started in Abu Mousa and its surrounding areas. The establishment of Crescent Oil Company accompanied this, under which was a group of global companies that contributed in varying shares.
Phase Two…Good Fortune Begins
On 09 October 1972, H.H. Sheikh Dr. Sultan bin Mohammad Al Qasimi, Ruler of Sharjah, announced the discovery of oil in well Mubarak (1) first oil shipment was exported on the 18th of July 1974.
Phase Three…Efforts Continue
In January 1974, a new concession agreement was signed to explore oil in the territorial waters and continental shelf of the Eastern sector of the Emirate with US Company Reserve Oil and Gas. The Company drilled an exploratory well but did not find oil, and as such, relinquished its concession in June of 1977.
In December 1975, a concession agreement was signed with Houston Oil and Mineral that included the territorial waters of Al Hamriyah area. This company relinquished its concession in March 1977.
On the 18th of May 1976, a new agreement was signed with two US companies, namely Nicklis and Pinnacle Oil, to explore and extract oil in the area that was previously relinquished by Crystal Company. However, both companies relinquished their concessions at a later stage.
In November 1978, the government of Sharjah signed an oil exploration agreement in a 500-kilometer offshore area that had been previously relinquished by Houston Oil located opposite Al Hamriyah coast. The concession was split equally between two companies: Forman Exploration and London and Scotch Marine. The first discovery of a gas pocket in the territorial waters of the Emirate was announced on the 6th of February 1980.
In November 1978, a concession agreement was signed between the Government of Sharjah and Amoco, branching from Standard Oil of Indiana, considered the second largest US company at the time. The agreement was for the company to obtain a concession including the entire Western region of Sharjah (approx. 1000 square kilometers).
In December 1980, discovery of gas and light oil in Al Sajaa onshore field, located 25 kilometers from Sharjah was announced. In November 1980, the Government of Sharjah signed a new oil exploration agreement in the offshore area of the Emirate with Australian Unigulf Petroleum. The concession area was about 500 square kilometers. This agreement was later cancelled due to the company’s non-compliance.
On 20 June 1982, H. H. Sheikh Dr. Sultan bin Mohammad Al Qasimi, Supreme Council Member – Ruler of Sharjah, opened Al Sajaa gas processing facilities and the export port in Hamriyah. On 30 June 1982, the first shipment of light oil was exported from Al Sajaa.
On 19 February 1981, an oil exploration concession agreement was signed for an area of about 760 square kilometers in Abu Mousa Island with Meridian Oil “NL”.
In December 1982, a gas sale agreement signed with Emirates General Petroleum. The agreement aimed to supply fuel gas to electricity and water companies in the Sharjah and Northern Emirates Supply commenced on 01/11/1983.
On 23/03/1984, Sharjah LPG Company (SHALCO) was founded and a liquefaction and sweeting plant constructed. The first LPG shipment was exported on 25/06/1986.
On 1984, an agreement made with Dusup (Dubai Supply Authority) to supply gas to the Jebel Ali electricity plant via a 75-kilometers pipeline. Supply began in February 1986.
In November 1997, a concession agreement was signed with both Crescent Petroleum and Atlantis from Norway to explore oil and gas in the territorial waters of the Emirate.
In June 1998, an oil and gas exploration concession agreement was signed with Crescent Petroleum for the onshore areas of the Emirate.
In April 2000, an agreement was signed between the Government of Sharjah and US Matco to explore for oil and gas in the territorial waters off the Eastern coast of the Emirate (Khorfakkan, Kalba, Dibba)
SNOC established in 2010 , owns and operates the Sajaa concession, originally owned and operated by AMOCO/BP. The Sajaa asset, which includes the largest gas field discovered in the Northern Emirates and in operation since early 1980s, was the main supplier of gas in the northern emirates, peaking close to 900 million cubic feet per day [25.5 mcm] and meeting all of Sharjah’s demand and most of Dubai's during the 1980’s and 90’s.
The 25th June 2018 was an historic day for SPC as Sharjah’s first ever International Licence Round was launched in a bid to attract new investors and partners in the search for additional gas resources as quickly and effectively as possible.
Eni was declared as the winner for all 3 Areas, with the three new Concession Agreements being signed between Eni and Sharjah.
Caring for the People & Environment
The Council shows consistent interest in preserving the environment and protecting it against the hazards of the oil and gas industry in Sharjah by monitoring the activities of companies operating in this field and creating controls to prevent any harm to the people and environment.
In February of 1969, the Petroleum and Minerals Department was established in Sharjah with late Sheikh Mohammad bin Sultan Al Qasimi chosen as its first Director succeeded by Sheikh Salim bin Sultan Al Qasimi. On 01/121st December,/1980, Sheikh Ahmad bin Sultan Al Qasimi was chosen as the Department’s Director.
The Establishment of the Petroleum Council
In October 10th, 1999, an Emiri Decree was issued to establish the Petroleum Council of Sharjah, pursuant to Law No. (1) of 1999, which was finally amended by Emiri Decree No. 18/2000. The Decree named the members of the Council under the Chairmanship of the late H.H Sheikh Ahmed Bin Sultan Al Qasimi.