Although global oversupply concerns continue to depress crude prices, producers in the Middle East and North Africa (MENA) region have invested around US$294 billion in oil, gas and petrochemicals projects that are at the pre-execution phase.
According to Middle East business intelligence service MEED, the MENA region continues to pour in investments in expanding oil capacity, Saudi Gazette reports. In addition, Saudi Arabia and the UAE are studying investments in higher-cost sour gas and shale gas in order to meet growing domestic demand.
The MENA Oil and Gas 2017 report says that “while oil and gas spending globally is expected to continue to decline, Middle East producers are looking to buck the trend and maintain spending in order to meet production targets.”
In comparison, Wood Mackenzie has estimated that 2017 would be a year of stability and opportunity for global oil and gas. At oil prices above US$50 per barrel, U.S. Independents could increase investment by over 25 percent this year, but total spend for the oil majors is expected to drop by around 8 percent, WoodMac says.
In the MENA region, however, investment will continue to rise. MEED Editorial Director Richard Thompson said, as quoted by Saudi Gazette:
“With an estimated $294bn-worth of projects in the pre-execution phase, the sector provides a wealth of opportunity for business from Saudi Arabia’s ambitious oil-to-chemicals complex to the re-emergence of the Iran oil industry following years of sanctions.”
According to the MENA Oil and Gas 2017 report, Saudi Aramco plans to invest by 2025 a total of US$334 billion in the oil and gas value chain. Kuwait, for its part, is seen spending US$115 billion on energy projects over the next five years to ramp up its crude oil production capacity to 4 million bpd by 2020.
By Tsvetana Paraskova for Oilprice.com
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