DUBAI The United Arab Emirates (UAE) is to invest $1.2 billion in a major new oil field straddling Sharjah and Fujairah, newspapers reported Wednesday.

****Al-Khaleej*****, quoting sources at the Oil Department in Sharjah, said drilling on the first wells would start in December and the project would need investment of around $1.2 billion.

The U.S. firm Matco Oil recently signed an exploration accord with the Sharjah government for the same zone as the discovery, the daily noted.

No estimate was given for reserves in the field, but oil sources told ****Al-Khaleej**** that the figure of 12.5 billion barrels reported in the press on Tuesday was exaggerated.

The UAE has an OPEC production quota of around 2 million barrels per day, with Abu Dhabi -- the largest emirate and capital of the Persian Gulf Arab state -- accounting for the lion's share of output.

The discovery would place Fujairah, a member of the Seven-Emirate Federation, on the map of oil producers for the first time, AFP reported.