MENA To Invest $740 Billion On Energy Projects Through 2017: Report
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Saudi Arabia is set to lead the Middle East and North Africa (MENA) in investments on energy projects over the next five years, said a report by the Arab Petroleum Investments Corp (Apicorp) on Saturday.
According to Apicorp, as cited by Bloomberg News, oil producers in the MENA region would spend up to $740 billion to enhance their energy production capabilities, with Saudi Arabia alone spending up to $165 billion.
Saudi Arabia is set to lead the Middle East and North Africa (MENA) in investments on energy projects over the next five years, said a report by the Arab Petroleum Investments Corp (Apicorp) on Saturday.
According to Apicorp, as cited by Bloomberg News, oil producers in the MENA region would spend up to $740 billion to enhance their energy production capabilities, with Saudi Arabia alone spending up to $165 billion.
The report goes on to predict that the United Arab Emirates will be the second highest spender at $107 billion, while Algeria is expected to overtake both Qatar and Iran as the third-largest investor with $71 billion in investments.
[quote]”Tighter international sanctions, and the retreat of foreign companies, have ended up taking a toll on Iran’s elusive energy investment program,” Apicorp said, noting that a large part of Algeria’s spending will mainly be as a result of ‘catch-up investment’.[/quote]Related: Saudi Arabia May Become Net Oil Importer By 2030: Citigroup
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Apicorp said that the oil-producing countries in the region would be able to finance the energy projects on their own, as long as crude oil prices remained above $100 a barrel. The report added that energy investments in MENA were picking up after a period of stagnation following the 2008 flobal financial crisis.
“Compared to past assessments, which have been uniformly and consistently revised to reflect the full scale and scope of the power sector, investment appears overall on the rise again, driven mainly by costs and acatchâ€up effect,” it said, as cited by Emirates 24/7.
[quote]“Indeed, our ‘average project cost’ index, which has been subdued in the wake of the global financial crisis, is once again on an uptrend.”[/quote]Related: How Energy Consumption, Employment & Recessions Are Interlinked
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The report however warned that energy projects in the region still faced many challenges, including rising costs and feedstock supply, mainly from natural gas.
“Energy project costs would have certainly quadrupled during the last ten years, if not for the dampening effect of the global financial crisis.”
“The likelihood is that costs will continue rising. However, despite efforts to quantify in a meaningful way each of the above mentioned parameters, we have found it difficult to infer how far up and for how long the overall cost trend is likely to be when combining all components.”
