DAMMAM
The Mena region has already committed $345 billion (Dh1.28 trillion) to critical energy projects under execution while an additional $574 billion worth of development is planned over the next five years, bringing total committed and planned investments up to $919 billion to meet growing demand and demographic and urban expansions, according to Mena Energy Investment Outlook, issued by Arab Petroleum Investments Corporation, Apicorp.
“The GCC is driving investment in the region and will be well positioned on the back of increased prices with Saudi Arabia and the UAE representing 38 per cent of planned investments, at $149 billion and $72 billion respectively, between 2018 and 2022, as both countries look to boost their upstream oil and gas sectors,” said the report, which was prepared by Apicorp Research Unit.
Elsewhere, planned investments between 2018 and 2022 are estimated to be $72 billion in Egypt, $59 billion in Kuwait, $58 billion in Algeria, $37 billion in Iraq, $9 billion in Oman and $5billion in Bahrain. Planned projects for the remaining GCC countries may reach $57 billion.
“The governments in the region’s non-exporters will prioritise investments in their domestic power sectors as electricity demand continues to rise,” the report noted.
“With estimated planned Mena investments in the energy sector at $574 billion for the next five years, the power sector accounts for the largest share of investments, at $187 billion. The oil and gas sectors will represent $169 billion and $150 billion respectively, with the remaining investments in petrochemicals. Projects under study represent by far the largest portion of planned investments, at $251billion. Projects under contract bid amount to $92 billion, while those under design reach $86 billion, the report explained.
“We expect the Mena region to continue investing heavily as major energy-exporting countries expand the size of their energy sector and strengthen their positions in global markets,” it said.
Committed investments in the energy projects currently under execution are estimated at $345 billion for the five-year period. The oil sector accounts for the largest share of investments at $131 billion, with the majority in upstream projects. Total committed gas and power investments are approximately $106 billion and $95 billion respectively, followed by chemicals at $14 billion. The GCC represents $171 billion in committed investments, approximately 50 per cent of the Mena total,” it added.
A breakdown showed that Iraq emerged among the largest investors with $47 billion as oil investments account for $27 billion, followed by UAE at around $45 billion, with upstream investments in Upper Zakum and power projects like the Barakah nuclear power plant accounting for a large proportion of investments over the outlook period.
Saudi Arabia has committed an estimated $42 billion for the outlook period, of which $14 billion will be in the power sector. In Egypt, committed investments stand at around $39billion, with power-generation projects accounting for $18 billion. Kuwait and Oman have committed $31 billion each. Algeria has committed $12 billion over the medium term.
“Governments will prioritise critical investments in their energy sectors. The GCC will use investments to keep its status quo as the key supplier of energy to the rest of the world. Saudi Arabia has the largest committed and planned investments in the medium term- while Kuwait and the UAE have ambitious programmes throughout the value chain,” the report said.
Apicorp is a multilateral development bank wholly owned by the member states of the Organisation of Arab Petroleum Exporting Countries, Oapec, and is devoted to investing in, financing and providing advisory services to the Arab energy sector.
