Dubai’s Problems Solved*

Just as the latest debacle out of Dubai seemed to secure the world’s most picked-on Emirate’s status as Abu Dhabi’s pet poodle, comes this exciting news:

“I can confirm that oil has been discovered and expect production to start within a year,” Sheik Ahmed bin Saeed Al Maktoum, the chairman of government-owned Dubai Petroleum Establishment, or DPE, told Zawya Dow Jones, confirming local media reports earlier Thursday that a new offshore oil field had been discovered in the emirate.

Via 4thUPDATE: Dubai Discovers New Oil Field Amid Debt Woes – WSJ.com.

Wait! Is it too late to change the name of the Burj Khalifa back to Burj Dubai? Take Cirque du Soleil and the QE2 off the auction block? A substantial oil discovery would be a huge find for the deeply-indebted Dubai, whose puny oil reserves cough up merely an estimated 70,000 barrels daily- far less than the 2 million Abu Dhabi puts out every day.

Alas, Dubai’s dream-big mantra has once again bitten them in the ass.

Dubai’s newly discovered oil field is unlikely to generate the big cash needed to get the debt-ridden emirate out of the doldrums, analysts say, challenging the government’s claim that it could inject new life into its ailing economy.

AFP: New Dubai oil find a drop in the ocean of debt, say analysts.

Sorry Dubai, we’re all jaded. Definitely this analyst:

“My feeling is that this a political message aimed at trying to provide a more positive piece of news in an otherwise quite depressing outlook for Dubai, which is obviously struggling with its para-statal debts.”

Nor did investors see the initial announcement last Thursday as a rallying call. The Dubai Financial Market’s all-shares index has remained virtually flat.

But it would make for an interesting parlor game. What would Dubai do if it suddenly came into exorbitant oil wealth? Buy all of Las Vegas and transport it to Sheikh Zayed Road? Replicate Paris, to-scale, on a giant floating island? Give all their expat laborers a living wage?

My guess: Buy Abu Dhabi. And then shut them down.