20-05-04

With Middle East's share of the world oil export is expected to rise to 70 % by 2030, Arab world will have to rise to the challenges in the oil refining and petrochemical industries. According to analysts, oil exports from the Middle East are projected to surge from over 20 mm bpd to 46 mm bpd in the next 26 years.

The region's standing in natural gas exports will also get a major boost. Demand for natural gas is expected to rise 3,377 bn cm in 2010 and 5,047 bn cm in 203.

According to Mirza Al Sayegh, Enoc's deputy chairman, Middle East's oil and petrochemicals industry will have to ensure global competitiveness since the region will have to provide the bulk of the world oil and petrochemical trade.

"Existing petroleum resources are expected to last for about 50 years. We have a moral obligation to conserve the resources for future generations while sustaining economic development," he was quoted.

To meet the challenge, the region's five leading oil powers -- the UAE, Saudi Arabia, Kuwait, Iraq and Iran -- will be pumping an average $ 18 bn-$ 20 bn a year into expansion projects that will boost their output to more than 42 mm bpd before 2007.

This expansion, analysts pointed out, is essential to meet the expected growth in world oil demand, which is forecast to rise by around 45 mm bpd to more than 120 mm bpd by 2025. In the next four years, these five countries will be pumping some $ 100 bn into their hydrocarbon sector. The increase means that the share of these five producers will rise from 28.4 % in 2002 to 35 % in 2025, while their share of worldwide natural gas production will jump from 12.4 to 20 %.

The UAE has invested over $ 8 bn during the past four years into the oil sector as part of the long-term plan to maintain its current output and expand capacity to nearly 4 mm bpd. Investments in the oil sector totalled around Dh30 bn between 1999 and 2002 while more than $ 2 bn was channelled into the sector last year.

Most of the investment was made by the Abu Dhabi National Oil Company as it is implementing most of the expansion projects in the Emirates. In the backdrop of a sustained oil price rally, the UAE's oil sector revenue is expected to surpass Dh 100 bn mark this year. Government forecasts show that the sector would earn some Dh 102.2 bn, which is 9.5 % higher than the what was recorded last year.

Source: Khaleej Times