Posted on 08/14/2002 3:31:50 AM PDT by Prodigal Son
Arab states will have to pump at least $113 billion into projects to expand their oil, gas and petrochemical industries in the coming five years, according to official estimates.
Around $49.6 billion will be invested in capacity maintenance and expansion projects in the crude oil sector while gas projects will receive nearly $36 billion and the rest will be channelled into refining and petrochemical ventures.
But the massive investments between 2001 and 2006 still fall short of the oil and gas potential in the Arab world and the actual needs of the local and foreign markets, said a study by the Kuwait-based Organisation of Arab Petroleum Exporting Council (Oapec).
In the absence of sufficient investments, international markets could be jolted again by a fresh supply crisis since the Middle East controls more than 60 per cent of the world's oil.
"Altogether, Arab countries are planning to invest at least $113 billion in oil, gas and petrochemical projects during the 2001-2006 period, which will provide good opportunities for cooperation with foreign partners," added the paper.
"That level of investment nevertheless remains insufficient in relation not only to their huge hydrocarbon resources but also to the expectations and needs of consuming countries.
"This situation is the consequence of a number of factors, such as the erratic movements in prices, political tensions in the Middle East and the sanctions imposed on Iraq, Iran and Libya. Moreover, there is no sign that the situation is going to change in the near future."
The 10-nation Oapec warned that more investments are needed in the upstream oil and gas sector in the Middle East and North Africa in order to avoid "sooner or later an explosion in oil prices and a fresh world energy crisis."
It said expansion projects would boost the combined Arab crude production capacity by around three million barrels per day to 29.5 million bpd in 2006.
This will push up their share of total world crude supplies from 29.3 to 3.4 per cent during that period.
But the study noted that nearly $28.8 billion of the investments needed in the oil sector would be used to maintain available production facilities.
It gave no breakdown but industry experts said the bulk of investments would be pumped in the UAE, Saudi Arabia and Kuwait, which possess around 450 billion barrels of crude, nearly 45 per cent of the world's total recoverable oil wealth.
The three Gulf oil giants also have a sustainable oil output capacity of around 15 million bpd, which is set to surge over the coming few years as they push ahead with capacity expansion programmes.
The Gulf region is also set to attract the bulk of gas investment as the UAE is expanding its facilities and Qatar and Oman are pursuing major LNG ventures.
In Saudi Arabia, at least $25 billion are expected to be channelled into the gas sector by a group of international companies under what is termed as the Gas Initiative.
"The development of natural gas resources in the Arab countries is continuing at a far more rapid pace than that of oil resources. Between 1999 and 2001, their crude oil production rose by around 26.9 per cent whereas their output of natural gas soared by 75.8 per cent."
Kuwait expands export facility
Posted: August 13th, 2002
Kuwait Oil Company (KOC) has invited seven international firms, (Kellog Brown & Root, Bechtel Group, Flour Daniel, ABB Lumnus Global and Kvaerner E&C, Technip Coflexip and Japan's JGC Corp), to bid for a USD382 million project to expand crude oil export facilities at Al-Ahmadi, by November 10.
Considering that the US is in a drilling slump, that there is some evidence to suggest that we are not replacing our natural gas reserves, and producers are saying that they need $5.00/mcf to make any money, it make you conclude that we will soon be importing natural gas from the mideast.
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