A new report from MEED Insight shows that the Middle East and North Africa (MENA) region is set to spend US$294bn on oil, gas and petrochemicals projects, despite the fall in the oil price since 2014
New research from Middle East business intelligence service MEED shows that despite lower crude prices, the MENA regional is continuing to spend heavily on oil infrastructure to maintain capacity and, in some countries, meet ambitious capacity expansion targets. Gas spending is also set to increase as countries such as Saudi Arabia and the UAE study higher-cost sour gas and shale gas plays to meet rapidly growing domestic demand.
MEED Insight’s MENA Oil & Gas Report 2017 says that about US$294bn of oil, gas and petrochemicals projects are at the pre-execution phase across the MENA region even while concerns about global oversupply continue to suppress oil prices.
The year 2016 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 dropped 34 per cent to US$32.4bn in 2016, according to data from regional projects tracker MEED Projects.
“The oil, gas and petrochemicals sectors will continue to be the backbone of economies across the MENA region,” says MEED Editorial Director Richard Thompson. “With an estimated US$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.”