Engineering news
Governments and national oil companies in the Middle East need greater levels of investment from the private sector to meet growing energy demands.
According to estimates by the International Energy Agency, the oil and gas sector in the Middle East will require a total of £1 trillion (US$1.6 trillion) of new investment over the next 25 years, equating to £42 billion (US$65 billion) annually.
Jafar said there was a need to provide incentives for private sector investment and to increase the level of partnership between the public and private sectors to address the growing needs of energy supply in the Middle East.
Speaking at the Oil & Money Conference in London, Majid Jafar, chief executive of Crescent Petroleum, said: "The role of the private sector in all sectors is important in bringing in project management skills, new capital and technology. It is needed to help create new jobs in partnership with the national oil companies and regional governments, in order to address the future investment and energy needs of growing economies.”
He added that energy subsidies for oil and gas in the Middle East and North Africa region also need to be reduced. According to a report released in April by the International Monetary Fund, the region spends over £150 billion (US$237 billion) annually on energy subsidies, roughly 34% of the global total.
The energy markets in the Middle East are now the fastest growing energy markets in the world. The Middle East’s energy demand was equivalent to 12.5 million barrels oil equivalent per day in 2010. It is forecast to expand to 15.5 million barrels of oil equivalent per day by 2020 and to reach 18.5 million barrels of oil equivalent per day by 2030, the report added. The Middle East has 48% and 43% of global oil & gas proven reserves respectively.
Meanwhile, chief executive of Saudi Aramco, Khalid A. Al-Falih, has announced the company plans to increase the average of its conventional oil recoveries to 70%, double the world average. The company is planning “massive investments” to discover large, untapped oil and gas resources, both onshore and offshore, and both conventional and unconventional.
Saudi Aramco has the world’s largest spare oil production capacity of more than 2 million barrels per day. Speaking at the World Energy Conference in Daegu, South Korea, Al-Falih said: “In the past two years alone, we have swung our production by more than 1.5 million barrels a day in order to meet market supply imbalances and retain that vital market stability the world needs.”