A Comparative Analysis of Oil Production Sectors in Saudi Arabia and the United Arab Emirates

Abstract

This article applies a comparative approach to the oil sector governance in two petroleum-rich countries in the Middle East: Saudi Arabia and the United Arab Emirates (UAE). More explicitly, it examines the factors which best explain variation in the strategies they have been pursuing in the upstream sector since the establishment of their national oil companies (NOCs). By drawing on the expropriation/ privatization literature in the field of Energy Studies, this paper proposes a theoretical framework to analyze the logics behind different forms of exploration and production strategies in the petroleum sector. Theoretically, this research aims at advancing an analytical toolkit to better address and understand the actual determinants of the decision-making process in the upstream. Empirically, the model is tested on the divergent cases of Saudi Arabia and the UAE, and a number of lessons are drawn. Ultimately, this paper should raise awareness among scholars and policymakers alike about the little knowledge we have on the domestic mechanisms driving the upstream strategies in oil producer states.