British consultants are already strongly positioned in the UAE’s energy sector, which is expected to see tens of billions of dollars of new investment as the Emirati hydrocarbons industry seeks to expand output.

Contracted private power capacity*
Abu Dhabi 36%
Bahrain 9.6%
Oman 11%
Saudi Arabia 23.4%
Qatar 20%
*=GCC-wide as of January 2010. Includes projects in operation and under construction
**=Includes the Fujairah 1 and 2 IWPPs sponsored by Adwea. 
Source: MEED Insight

Power output in the UAE has grown faster than in almost any other country in the world. Over the past four years some $5bn has been invested in power and water desalination projects and total generating capacity is forecast to grow by an average 6-8 per cent annually over the coming five years. Water production, already the world’s highest at more than 300 litres per person per day, is expected to rise by an average 5 per cent a year.

British business is helping the Emirati authorities with its energy projects. The major new power and water desalination plant in Fujairah, for example, was developed by Abu Dhabi Water & Electricity Authority in partnership with the UK’s International Power and Marubeni of Japan. The British company was also a key player in the development of the Shuweihat independent power and water project in Abu Dhabi. 

Contracted private desalination capacity*
Abu Dhabi 47%
Bahrain 8%
Oman 6.4%
Saudi Arabia 28.5%
Qatar 9.5%
*=GCC-wide as of January 2010. Includes projects in operation and under construction
**=Includes the Fujairah 1 and 2 IWPPs sponsored by Adwea. 
Source: MEED Insight

Established links between UAE and UK

British companies attribute their success in the Emirates to strong, established trade links. These were further cemented when the two nations’ governments launched a drive to double mutual trade by 2015. Abu Dhabi was one of the first foreign capitals visited by David Cameron after he became prime minister.

“One of the things in our favour is that relationships are very strong here,” says Terry Willis, managing director in the region for the UK’s Energy Industries Council (EIC). “We do pretty well. The UK has a strong history in the UAE because the standards here are British and BP has been a partner of Adnoc,” says Willis.

Among the major players, UK consultants Mott MacDonald is particularly well dug-in.Charles Ellinas, worldwide head of oil and gas sector business for Mott MacDonald, says the market was extremely active, but business then cooled off because the credit crunch slowed new project development. This has added to the competitive pressures. “The number of projects is smaller, while the number of [bidders] is still the same,” he says.

The strength of competition for contracts in the region was evident at this year’s Abu Dhabi International Petroleum Exhibition and Conference. Some 200 Chinese companies were present. Whereas many Far Eastern companies would once have competed largely on price – which still remains an issue – today they will also challenge Western firms on technical product and service quality.

Fortunately, Mott MacDonald’s operation is not entirely dependent on local Emirati demand. The country acts as a hub to support the growing flow of business in Iraq.

“We are using the UAE to support a lot of international oil companies that are going into Iraq and which use the UAE themselves as a base,” says Ellinas.

The Mott MacDonald offices in Abu Dhabi and Dubai service this growing business. They carry out engineering work and early phases of project management, while construction management is done on the ground in Iraq.

The firm also expects to diversify its UAE operations in sector terms in response to the surging Emirati interest in renewable energy.

Renewable energy in the UAE

With the Masdar low-carbon urban development outside Abu Dhabi as its flagship project, the UAE is increasingly focused on protection of the environment and renewable energy sources. Nuclear plants are to be built in Abu Dhabi and Fujairah as the UAE looks for ways to meeting rising power demand without adding to its already hefty carbon footprint. Korean companies have secured the first major contracts but there could well be scope for UK firms to win subcontract and related business.

Many environmental and low-carbon ideas being explored in pilot form in the Masdar project could provide scope for British business and a UK trade mission will visit the World Future Energy Summit in Abu Dhabi in January to explore the opportunities.

The sorting of waste for recycling is another growth sector being aggressively pursued by a number of different agencies in the UAE. This is an area where the UK has ample experience. Another area that could see heavy investment is the handling of construction waste.

The potential for trading growth across the environmental agenda is underpinned by the UAE’s financial strength. The country has the capital to explore and promote new energy and environmental technologies more effectively than many other emerging economies.