Arab oil wealth hits highest level at 650b barrels

Heavy investment and the development of new exploration and drilling technology have boosted proven Arab oil wealth to its highest level of more than 650 billion barrels at the end of 2001 despite a steady increase in production, according to official figures.

In 2001 alone, the recoverable crude reserves in the Arab region gained around 4 billion barrels following new discoveries in the Gulf and Libya and the deployment of new technology that can hunt hydrocarbon in deeper layers.

Over the past decade, a period characterised by violent oil market fluctuations, Arab oil resources have climbed by around 11 billion barrels as they stood at 640 billion in 1991.

The increase occurred although Arab nations produced a cumulative 87 billion barrels during that period, at an average 20 million barrels per day.

Figures by the Kuwaiti-based Organisation Of Arab Petroleum Exporting Countries (Oapec), which groups 10 key regional oil producers, showed the total Arab proven crude reserves grew by 0.6 per cent to 650.8 billion barrels at the end of 2001 from 2000.

"There were new discoveries in the region, including a large discovery in Libya, estimated at more than 250 million barrels...the increase meant that Arab states controlled nearly 61 percent of the total global recoverable crude reserves," Oapec said in the 2002 Arab economic and social report released by Abu Dhabi-based Arab Monetary Fund.

Experts said the reserves could stabilise in the medium term despite an expected increase in Arab production, mainly Gulf producers which alone control more than 45 per cent of the world's oil wealth.

They noted that most regional producers have introduced the advanced horizontal drilling technique and new technology capable of reaching deeper layers, where more hydrocarbon deposits are believed to be embedded.

The gas sector in the Arab world performed even better, soaring by around 10 percent to 40.7 trillion cubic metres at the end of 2001, Oapec said.

The reserves accounted for 25.5 per cent of the global natural gas resources and the increase was mainly caused by a rise of more than three trillion cubic metres in Qatar's reserves, which stood at 14.6 trillion cubic metres at the end of last year, the third largest reserves of natural gas in the world after those in Russia and Iran.

The report put the combined Arab oil production in 2001 at around 20.5 million barrels per day compared with 21 million bpd in 2000.

The decline and a $4 slide in crude prices pushed the Arab oil income to around $152 billion from $192 billion.

In contrast, gas production jumped to around 414 billion cubic metres last year from 382 billion cubic metres in 2000 as more Arab countries continued to switch from oil to gas as a cleaner source of energy and others pursued plans to expand their existing gas projects and build new ventures for export purposes.

Independent estimates showed Arab states earned nearly $1.35 trillion from the 87 billion barrels they have produced since 1990.