Middle East: Downstream Driving Energy Investment in the Arab World
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Monday, 03 October 2011 |
The UAE is set to overtake Iran to become the second largest investor in energy in the arab world, behind only Saudi Arabia. According to the Dammam-based Arab Petroleum Investment Corporation (Apicorp), an affiliate of OPEC, energy capital investments across the Middle East and North Africa could potentially total $525bn between 2012 and 2016. However, the organisation warned, funding challenges and rising costs.
Much of the investment, Apicorp noted in its latest report, is in the downstream sector. “In the contexts of a global economic downturn and regional political turmoil, our review of Mena energy investment for the five-year period 2012-2016 points to a broken momentum, yet mixed outlook. On the one hand, driven by the oil downstream and the power sector the anticipated investment of $525bn is higher than the actual capital requirements found in the last review,” said the organisation. “On the other hand, such a level remains well below the potential investment identified on that occasion. Whatever the interpretation of these findings is, one thing is clear. Project sponsors will continue to face many of the same challenges.”
The report concluded that internal financing should not pose major problems as long as OPEC Basket Crudes stayed above $90 per barrel. However, external financing “is likely to be daunting", according to the organisation.
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