Oil prices continued to climb…
Big Oil defied environmentalists and…
Energy investments in Europe, the Middle East, and Africa are set to exceed $805 billion over the next five years, according to Saudi Arabia’s Arab Petroleum Investments Corporation.
This is $13 billion more than the energy investments APICORP estimated will flow into MENA between 2021 and 2025 in its previous five-year outlook, published in 2020.
The company based its updated forecast on four things. First, there is renewed optimism about the global economy. Second, APICORP, like most other forecasters, expects a boost in energy demand stemming from the improved global economic outlook.
In addition to these developments, APICORP named Libya as a driver behind higher MENA energy investments, noting some $10 billion of the total investment volume are likely to go into the North African country’s oil and gas industry.
Growth in renewable generation capacity is the third factor that APICORP identified in its report as determining the increase in energy investments across the MENA region. The authors noted they expected some 3GW of new solar power capacity to be added in MENA this year alone, with another 20 GW to be added over the years to 2025.
Investments in power generation and distribution will account for the biggest chunk of the total, at $250 billion over the five-year period, with $93 billion in already committed investments.
Investments in natural gas across the MENA region are seen declining over the five-year period, however, to $75 billion from an earlier estimate of $84.5 billion. This downward adjustment is due to several large-scale projects that were completed last year, causing energy investors in the region to be wary of adding to an already oversupplied market by building more production capacity.
On the other hand, petrochemical investments are seen rising by $14.2 billion from the earlier forecast to a total of $109 billion. Already committed investments for the period, however, were down by $7.7 billion to $12.5 billion after the completion of several projects in 2020.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com