After years of talk about the declining role of oil
in the global economy, and of OPEC’s demise, the COVID-19
pandemic has placed Middle East producers at the heart of the
drive to prevent the health crisis becoming a global economic
catastrophe, says GlobalData, a leading data and analytics
company.
Accounting for around 52% of global oil reserves and
roughly 37% of global production, Middle East hydrocarbons are
critical to global energy supply, and to global economic
stability.
Richard Thompson, Editorial Director at GlobalData,
comments: “Maintaining its influential position is a strategic
priority for the region’s oil producers, and hundreds of billions
of dollars are being invested in the exploration and development
of new oil and gas reserves, and into the development of
downstream oil refineries and petrochemicals
plants.”
Since 2011, more than $300bn of oil and gas project
contracts have been awarded in the Middle East and North Africa
(MENA) region. These investments have strengthened Saudi Arabia’s
position as the world’s most influential oil exporter, and pushed
Qatar into the number one spot for both liquefied natural gas
(LNG) and gas-to-liquids (GTL) production.
Thompson continues: “Despite the fall in demand
triggered by the COVID-19 outbreak, Middle East oil and gas has
entered an expansive period as regional firms undertake major
field development programs, expedite unconventional hydrocarbons
exploration and work to secure future market share in the
industry.”
According to GlobalData's regional projects tracker,
there are around $58.4bn of upstream oil projects currently under
execution in MENA countries. By mid-2025, this will lead to a
significant expansion of the oil production capacities of
operators. With many field discoveries expected to move into
project development in late 2020, the region is expected to
maintain a steady flow of capital expenditure towards upstream
oil schemes.
After a year of significant delays in the Middle East
downstream sector in 2019, a range of large-scale projects is
expected to come online in 2020, although some plans could be
delayed by the low prices triggered by the
pandemic.
Thompson concludes: “While downstream projects
activity has diminished in many regions around the world, the
Middle East remains on track to bring significant refining
capacity online over the next 15 years.”
