US embassy cable - 05ABUDHABI3008

S E C R E T SECTION 01 OF 02 ABU DHABI 003008 
 
SIPDIS 
 
E.O. 12958: DECL: 07/06/2015 
TAGS: PBTS, PREL, PHSA, EPET, ENRG, TC, GCC 
SUBJECT: ONE MORE CRACK IN THE GCC - UAE/SAUDI BORDER 
DISPUTE 
 
REF: ABU DHANI 2946 
 
Classified By: Ambassador Michele J. Sison, for reasons 1.4 (b) and (d) 
. 
 
1. (S) Summary.  Tensions between UAE and Saudi Arabia over a 
border dispute have broad implications for intra-Gulf 
Cooperation Council (GCC) relations and the long-term 
viability of the GCC.  UAE officials view Saudi objections to 
a planned causeway to link the UAE and Qatar as Saudi 
Arabia's attempt to prevent the other GCC states from 
deepening ties independent of Saudi Arabia.  President 
Khalifa is taking a vigorous personal interest in resolving 
this dispute favorably for the UAE.  UAE Deputy Prime 
Minister and Minister of State for Foreign Affairs Sheikh 
Hamdan bin Zayed al Nahyan (HbZ) will travel to Riyadh in 
mid-July to continue discussions with Interior Minister 
Prince Nayef bin Abdul Aziz and other key leaders.  UAE 
officials have told us that if the discussions do not go 
well, the UAE will "turn up the heat" on the Saudis.  End 
summary. 
 
Revival of Old Border Dispute 
----------------------------- 
 
2. (S) Earlier this year, tension emerged between Saudi 
Arabia and the UAE and Qatar, when Saudi Arabia objected to 
UAE plans to build a causeway over the Khor Al Odeid waters 
that would directly connect the UAE to Qatar.  The UAE 
insists that under a 1974 border treaty, it gave up the 
onshore stretch of land at Khor Al Odeid, but not the 
territorial waters, and UAE leaders have used this incident 
to reinitiate long-standing objections to the 1974 treaty. 
According to a close aide of Abu Dhabi Crown Prince Mohammed 
bin Zayed (MbZ), President Khalifa is "furious" with the 
Saudis and is taking a personal interest in resolving the 
dispute to the UAE's advantage. 
 
3. (C) Former President Zayed signed the 1974 border 
agreement three years after the UAE's independence in order 
to obtain Saudi recognition, but the UAE never actually 
ratified the treaty.  According to the terms of the 
agreement, Saudi Arabia dropped its claim to the Buraimi 
Oasis region (located on the eastern edge of UAE territory 
near Al Ain), in return for Abu Dhabi giving up a 25 km strip 
of land at Khor al-Odeid that linked it to Qatar. 
Additionally, the two nations agreed that full control over 
any existing or future discoveries of cross-border 
hydrocarbons would be granted to the country controlling the 
majority of the field.  As such, the UAE gave up its claim to 
the Zararah oil field.  The Zararah field (known in Saudi 
Arabia as the Shaybah oilfield) spans the UAE-Saudi border in 
the Rub al-Khali (or Empty Quarter) and contains 15 billion 
barrels of proven oil reserves and 25 trillion cubic feet of 
untapped gas reserves.  Although 10 to 20 percent of the oil 
reserve lies within UAE territory, Saudi Arabia has economic 
rights to the entire reservoir under terms of the 1974 
agreement.   Saudi Interior Minister Prince Nayef bin Abdul 
Aziz visited the UAE on June 19 and met with HbZ to discuss 
the border dispute.  Nothing was resolved, and HbZ intends to 
travel to Riyadh in mid July to press UAE's points once 
again.  He and his aides have told us that they are "not 
optimistic" about successful resolution of the issue during 
the visit. 
 
It's Not About Oil, It's About the GCC 
-------------------------------------- 
 
4. (S) Contrary to press reports suggesting the UAE wants to 
exploit the Zararah oil field, our interlocutors tell us that 
the UAE's primary concern is having sovereignty over its 
territorial waters, and the implications this has for the 
UAE's independent relations with its neighbors.  According to 
MFA U/S Abdullah Rashid al Noaimi, the border dispute arises 
out of Saudi Arabian concern over losing influence over the 
smaller Gulf states.  The causeway is the UAE's redline 
issue, according to al Noaimi.  During a 26 June meeting 
between HbZ and PDAS Liz Cheney, HbZ stated that that the UAE 
would not accept joint sovereignty over the maritime border 
"no matter what the consequences" (reftel). 
 
5. (S) UAE leaders believe Saudi opposition to the causeway 
linking UAE and Qatar stems from the Saudi's objection to 
Gulf countries having ties independent of Saudi Arabia.  The 
Saudis had interfered on a number of issues important to 
other GCC states -- the Qatar-UAE gas pipeline and the 
Qatar-Bahrain causeway, and to Gulf states signing bilateral 
free trade agreements with other countries.  During his 
meeting with PDAS Cheney, HbZ predicted that the Saudis' 
efforts to block commercial cooperation, economic 
development, and health issues would doom the GCC. 
 
Turning Up the Heat 
------------------- 
 
6. (S) UAE officials view HbZ's mid-July visit to Riyadh as a 
critical juncture in the border discussions.  Al Noaimi told 
us recently that UAE officials believe the Saudi objections 
are "gut" reactions and not strategic, coordinated policies. 
Thus, HbZ intends to meet with key Saudi leaders Crown Prince 
Abdullah, Deputy Prime Minster and Minister of Defense Sheikh 
Sultan, Interior Minister Prince Nayef, and Minister of 
Foreign Affairs Saud al Faisal to gauge their level of 
engagement.  Both Al Noaimi and HbZ are pessimistic about the 
outcome of the Riyadh meetings, and according to Al Noaimi, 
"if there is no progress, we will try other things to turn up 
the pressure on them."  According to MbZ's senior aide, if 
the Riyadh meetings go poorly, the UAE is considering 
withdrawing the UAE Peninsula Shield Rotation Brigade from 
Hafr Al Batin. (Comment: Since the 1991 Gulf War, every GCC 
country has provided troops to Hafr Al Batin in order to 
protect Saudi Arabia from Iraqi invasion.  Although the 
argument could now be made that the troops are no longer 
necessary, UAE removal of its troops would send a clear 
signal to the Saudis of the UAE's unhappiness with the 
relationship between the two countries.  End Comment.) 
 
7. (S) Although the UAE has not mobilized additional troops 
to the border regions, it has taken small steps to impress 
upon the Saudis the seriousness of this dispute.  According 
to a senior executive of the Abu Dhabi Company for Onshore 
Oil Operations (ADCO), two months ago President Khalifa 
instructed him to send an ADCO team to the border along the 
Zararah oil field to "indicate a UAE presence."  He and his 
team were surprised to find an army presence already at the 
Saudi border.  The Vice President of Occidental Middle East 
told Ambassador that last year, the UAEG had asked Oxy if it 
would be interested in producing part of the Zararah oil 
field, but the UAEG decided to not pursue production because 
of Saudi objections.  Abdullah Nasser al Suweidi, Deputy CEO 
of ADNOC, told Embassy officers last week that ADNOC was 
simply waiting for the "go ahead" and it could immediately 
begin drilling on the field.  He opined, however, that the 
UAE was not likely to secure the right to exploit Zararah, 
and that it was using this as a negotiating point. 
 
8. (S) During his meeting with PDAS Cheney, HbZ stressed that 
he raised the border issue to inform of the issue and not as 
a request for action yet.  However, MFA U/S Al Noaimi has 
reiterated twice this past week that the UAE may come to us 
for assistance after HbZ's meetings in Riyadh. He stated that 
the UAE might ask the U.S. to encourage the Saudis to resolve 
the issue, out of concern for Gulf security and stability. 
SISON