The recently-released 2015 version of “BP Statistical Review of World Energy” provides fresh — but not necessarily surprising insights — of the Gulf states’ petroleum resources.
Collectively, GCC countries control around 30 per cent of the total known oil reserves, undoubtedly a significant percentage for any particular group. With a global share of 15.7 per cent, Saudi Arabia emerges as a second source of proven reserves after Venezuela, which in turn controls 17.7 per cent.
GCC countries can amass around 500 billion barrels of crude oil reserves, or roughly 41 per cent of total reserves of the Opec grouping. In turn, Opec, which also includes Venezuela and Iran among others, has control of nearly 72 per cent of total global reserves. Besides production, this level of reserves gives the grouping a source of strength in the petroleum market for years to come.
Turning to production, GCC states contributed 24 per cent of total oil output in 2013, certainly something extraordinary for a strategic product. Saudi Arabia and the UAE share were pegged at 13.1 per cent and 4 per cent of global oil output.
As regards natural gas, Qatar boasts nearly 25 trillion cubic meters of proven reserves, the third largest in the world. The top three are Iran, Russia and Qatar, accounting for 18.2 per cent, 16.8 per cent and 13.3 per cent, respectively.
Yet, Qatar stands out for being the largest exporter of liquefied natural gas (LNG), accounting for 32 per cent of total exports. Some 80 per cent of Qatar’s LNG exports go, to Asia notably to Japan, South Korea and India.
Also, Qatar continues having the highest growth increment in LNG resources, and its clients also include the US, the UK and Spain.
The LNG business is vital by virtue of accounting for 31 per cent of the global trade in gas. Qatar’s LNG capacity stands at 77 million tonnes per annum, second to none globally with further expansion put on hold which reflects sources of supply and demand in the world.
Petroleum resources will continue to play a vital part for GCC economies by virtue of being the primary source of treasury revenues. It accounts for 90 per cent of Kuwait’s treasury income.
Still, the phenomenon of relatively low prices further strengths the importance of oil at the expense of possible alternatives. Crude prices sustained drops by more than half since June 2014. Among other things, the causes include oversupply of crude oil and weakening demand in Europe partly reflecting the push for more fuel-efficient vehicles.
It is suggested that the amount of oil deposits in the GCC should last decades at current production levels. Saudi Arabia’s would last for more than 90 years ... and possibly more in case of new discoveries of oil and slower actual production.
In 2013, Saudi Arabia had an average oil output of 11.5 million barrels per day, but lower actual production is a possibility if Riyadh decides to resume the role of a swing producer.
The writer is a Member of Parliament in Bahrain.