Upstream investment has been driven by the need to meet rising demand and the need to replace resources depleted
Oil, gas and petrochemicals projects to the tune of about $294 billion are in the pre-execution phase across the Mena region even while concerns about global oversupply continue to suppress oil prices, a report said.
Gas spending is also set to increase as countries such as Saudi Arabia and the UAE study higher-cost sour gas and shale gas plans to meet rapidly-growing domestic demand, according to Meed Insight’s Mena Oil and Gas Report 2017.
Last year saw average crude prices drop to a 13-year low as oil and gas producers in the Mena region continued to face the impact of global oversupply.
The drop in crude revenues coincided with an eight-year low in the value of engineering, procurement and construction (EPC) contracts awarded in the regional oil, gas and petrochemicals sectors.
Investment in the Mena hydrocarbons industries hit an eight-year low in 2016, dropping 34 per cent to $32.4 billion.
"The oil, gas and petrochemicals sectors will continue to be the backbone of economies across the Mena region," Meed editorial director, Richard Thompson was quoted as saying in the report.
"With an estimated $294 billion-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."
Upstream investment has been driven by the need to meet rising demand, at both home and abroad, and the need to replace resources lost through natural depletion. In the GCC, Saudi Arabia, the UAE,
Kuwait and Qatar have all raised their sustainable crude oil production capacity, while Oman has managed to reverse a slump in output through its enhanced oil recovery (EOR) programme. Outside the GCC, production capacity and output has stagnated or fallen in Algeria, Egypt and Libya, mainly due to the political problems in those states. Iraq has been able to increase capacity through one of the world’s largest upstream investment programmes.
In terms of a subsector breakdown of future projects, the largest sector is petrochemicals.
