With Dubai's oil running out, the energy majors arrive

This switch is demonstrated by the fact that, whereas in the 1980s the oil sector accounted for around half of Dubai's GDP, and the emirate's light and sweet crude was the benchmark for all of the Middle East's production, the industry now accounts for around 5%.

However, most of the major energy sector companies already have, or are in the process of, moving to Dubai, as the emirate consolidates its role as the region's leading business hub.

The announcement of Halliburton, the US oil industry services company that it would relocate its headquarters to Dubai, caused a ripple or two in international energy circles.

Upstream majors such as BP and Shell are also heavily involved in Dubai.

BP controls its regional downstream activities of refining and distribution from the emirate, in this respect exploiting Dubai's communication channels, while remaining centred in Abu Dhabi, the UAE's energy powerhouse.

Shell, in fact, directs its regional upstream activities from Dubai, using the emirate's links with south east Asia to control the company's assets in Pakistan and further afield.

PSI Energy Holding, formerly based in Bahrain, recently announced its decision to move most of its corporate operations to Dubai in an effort to better access projects in the region.

The cluster of energy firms, a defined function of Dubai's qualities as a business hub and not its status as a producer, could be a growing trend in Gulf energy, asserts The Report, for a new impetus towards regional energy trading, both physically and on paper markets, is underway, with Dubai as its centre.

Both the Dubai Mercantile Exchange and the Dubai Multi Commodities Centre have established energy futures contracts for fuel oil and Oman crude which use Dubai's physical marketplace as a basis.

At the same time, Dubai remains a profitable market for regional energy producers in terms of its potential to purchase petrol, natural gas and electricity as its economy goes from strength to strength.

The ever adaptive emirate is shaping up to be a new financial and corporate centre for the energy industry worldwide, and is increasing its importance as a place to trade energy, perhaps due to, rather than despite, its declining status as a producer, says The Report.

Dave Lesar, Chairman, President and CEO of Halliburton, who has moved to Dubai with his corporate headquarters office to lead the company's efforts in growing business in the eastern hemisphere, said:

"This is already a strong market for us and we are excited to position the company in this key business area. This is an excellent place to live and a perfect environment from which to forge a working climate that is germane to the progression of international business."