Both oil and gas reservoirs of the United Arab Emirates (UAE) are known to contain significant amount of sour gas, mainly in the form of hydrogen sulfide. The presence of sour gas poses a difficult problem in terms of production problems, gas processing as well as oil refining. Unfortunately, little is known in the areas of sour gas behavior in the presence of UAE crude. Advances have been done in other areas of unwanted gas disposal and utilization (e.g. Islam and Chakma, Energy Conv. Management, vol. 34, 1993). This paper proposes several solutions to the sour gas problem, complete with numerical simulation and laboratory experiments. The proposed solution deals with both sour gas disposal and oil recovery with sour gas. The problems associated with these techniques are studied in detail in order to depict an accurate picture of the options available. The sour gas is found to improve the miscibility behavior of the crude oil, the recovery is improved when significant amount of sour gas is present in the injection stream. It is important, however, to differentiate between gas injection under stable and unstable flow conditions. If gas injection is carried out from the top of a reservoir, the flow is likely to be gravity-stabilized. In the presence of an unstable displacement, the gas breakthrough takes place early leading to a decline in the overall productivity. In order to fulfil the mandate of no-flare by the year 2000, Abu Dhabi oil companies are required to find a no-waste gas separation process. The proposed method solves the problem of gas separation and offers an economically attractive alternative to the current practice of gas flaring.