Perhaps the biggest distinction between Oman and the other Gulf monarchies is that Qaboos has never publicly named a crown prince or successor. Nonetheless, as with his neighbouring rulers, he has tried to use the state’s constitution to ensure the Al-Said’s dynastic longevity after his own death. An article of the constitution[170] stipulates that a Ruling Family Council will be responsible for choosing as successor in the event of the throne becoming vacant, while a decree in 1975 clarified that the sultan is the ‘source of all laws’; since then all of the government’s legislation has been styled as a royal decree. This included the 1996 Basic Law of Oman, which not only specified that Arabic is Oman’s official language and that Sharia law constitutes the basis of all legislation, but also stated that Oman’s system of government should be that of a ‘hereditary sultanate… based on justice, consultation, and equity’. The 1996 law also provided further clarification on the sultan’s position, describing the postholder as being Oman’s ‘symbol of national unity, as well as its guardian and defender’, and stated that ‘respecting him is a national duty and that his orders must be obeyed’.[171]
Economic development trajectories
Since independence, or in Saudi Arabia and Oman’s case their modern state formation, oil and gas exports have undoubtedly played the leading role in the economic development trajectories of all six Gulf monarchies, albeit with some important variations. In Saudi Arabia’s case, oil was first discovered in 1938 in Dammam, close to the town of Dhahran. Given that the kingdom was, as described, beyond British control, the Al-Saud had been able to offer early concessions to American companies, with Standard Oil of California and the Texas Oil Company being joined by Standard Oil of New Jersey and Socony-Vacuum Oil in the 1940s to form the Arabian American Oil Company or Aramco. Significantly, unlike the Arab nationalist republics, the Al-Saud were careful not to nationalise fully their oil industry in the 1950s and 1960s, preferring to maintain a close relationship with their American partners and benefit from the latest technologies and market access. Nevertheless, by 1973 the Al-Saud were under pressure within the region to change their stance, given the America’s support for Israel in the Yom Kippur War. A 25 per cent government stake in Aramco was duly taken, before full nationalisation in 1980 and a rebranding of the company in 1988 as ‘Saudi Aramco’.
Kuwait’s first oil discoveries were also in 1938, although it was a British-backed company — the Kuwait Oil Company — that won the first concession. Further discoveries were made throughout the 1940s and 1950s, and in the years after independence oil exports massively increased. Similarly keen to avoid oil industry nationalisation, the Al-Sabah nevertheless also came under pressure, and in the 1970s terminated the British concessions and granted the Kuwaiti government full ownership of the Kuwait Oil Company. Of the Trucial States, Bahrain was the first to discover oil, with the wells at Jebel Dhukan being opened in 1934. Notwithstanding the Al-Khalifa’s various treaty relationships with Britain and their hosting of the British Political Resident, the Bahrain concession was initially awarded to Standard Oil of California, which had established the Bahrain Petroleum Company or Bapco some years earlier. Although the Bahraini government did take a 60 per cent stake in Bapco in the early 1980s, 40 per cent remained with the American firm Caltex — the successor company to Standard Oil. Significantly, at this time a new Supreme Council for Oil was established to oversee Bahrain’s hydrocarbon industry, with the prime minister, Khalifa bin Salman Al-Khalifa, unsurprisingly assuming its chairmanship.
As with Kuwait, Qatar was closely tied to British oil concessions following the first drilling in 1939. Later offshore concessions in the 1940s were however granted to the American company Superior Oil and Central Mining and Investment, and in the 1950s to Royal Dutch Shell. In 1973, closely mirroring the Al-Saud’s decision to part-nationalise, the newly independent Qatari government took a 25 per cent stake in the country’s oil industry before choosing fully to nationalise the new Qatar Petroleum Company in 1976. In recent years, gas has become much more important to Qatar than oil, with the government-owned Qatargas being established in 1984. Following major discoveries, most of which were located in the massive offshore North Field shared with Iran, exports of liquefied natural gas commenced in 1997, and in 2001 a second government-owned gas company, Rasgas, was established.
The development of the UAE’s hydrocarbon industry is a little more complex to understand, much like its state formation. Given that most of the original concessions were signed before the UAE came into being, the two principal oil-producing emirates of Abu Dhabi and Dubai had already entered into agreements with different companies. In Abu Dhabi’s case, following the discovery of oil at Umm Shaif in 1958, the original British concessions were mostly renewed, with the granting of concessions to British Petroleum. Many other concessions were granted though, with Campagnie Française des Petroles, Royal Dutch Shell, Exxon-Mobil, Total, and the Japan Oil Development Company all winning sizeable stakes, most of which have been renewed. Since independence in 1971 a national oil company — the Abu Dhabi National Oil Company (ADNOC) — has always held controlling stakes in the various concessions, but these have never exceeded 60 per cent.[172] Similarly, Abu Dhabi’s gas industry has only been part-nationalised, with ADNOC holding stakes of 68 per cent and 70 per cent in the emirate’s two main gas concessions, while the remainder has been shared between British, American, and Japanese companies.[173]
With oil discoveries in the early 1960s, Dubai followed a similar pattern to its neighbour with the government-owned Dubai Petroleum Company managing several international concessions from Britain, the US, Spain, France, and Germany. Production increased greatly in the 1980s before peaking in 1991. Since then, Dubai’s oil industry has been described as simply ‘ticking over’, with Abu Dhabi having accounted for over 90 per cent of the UAE’s oil exports over the past decade.[174] After oil was discovered in the western province of Oman in 1964, the Omani government pursued much the same model as Abu Dhabi and Dubai, with its wholly owned Petroleum Development Oman taking a 60 per cent stake in the industry and granting concessions to Royal Dutch Shell, Campagnie Française des Petroles, and Partex. Production increased greatly throughout the 1970s, and eventually reached its peak in 2000, at the same time that Oman opened its first major gas plant at the port of Sur.
Today, the Gulf monarchies produce a combined total of about 16.6 million barrels of crude oil per day,[175] about 19 per cent of the global total, with the bulk being produced by Saudi Arabia, Kuwait, and the UAE — or more specifically Abu Dhabi. The six states also produce about 232 billion cubic metres of natural gas per year,[176] about 8 per cent of the global total, with the bulk being produced by Qatar, Saudi Arabia, and the UAE. More importantly, perhaps, the Gulf monarchies account for 37 per cent of all known crude oil reserves and 25 per cent of all known natural gas reserves,[177] with Saudi Arabia alone accounting for 25 per cent of global oil reserves[178] and with Qatar accounting for at least 15 per cent of global gas reserves.[179] As discussed later in this book, an important disparity between the six states has thus emerged, with a hydrocarbon-rich group — namely Saudi Arabia, the UAE, Kuwait, and Qatar — all of which have at least a few decades of supply remaining, and with a much poorer group consisting of Oman and Bahrain, the latter of which now has to import most of its oil given the depletion of domestic reserves.[180]
171
115. Valeri (2011), p. 139. Quoting articles 2, 3, 5, 9 and 41 of the 1996 Basic Law of Oman.
174
118. Dubai’s share is now only 4 per cent, with the remainder being made up of minimal exports from Sharjah, Ra’s al-Khaimah, and Fujairah. Ajman and Umm al-Qawain do not have commercially exploitable oil reserves. Davidson (2009), chapter 4.
175
119.
180
124.