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MENA region to invest US$574 billion in critical energy projects

The MENA region has already committed US$345 billion to critical energy projects under execution while an additional $574bn worth of development is planned over the next five years, bringing total committed and planned investments up to $919bn 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% of planned investments, at $149bn and $72bn 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 $72bn in Egypt, $59bn in Kuwait, $58bn in Algeria, $37bn in Iraq, $9bn in Oman and $5bn in Bahrain. Planned projects for the remaining GCC countries may reach $57bn.

''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 $574bn for the next five years, the power sector accounts for the largest share of investments, at $187bn. The oil and gas sectors will represent $169bn and $150bn respectively, with the remaining investments in petrochemicals. Projects under study represent by far the largest portion of planned investments, at $251bn. Projects under contract bid amount to $92bn, while those under design reach $86bn, 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 $345bn for the five-year period. The oil sector accounts for the largest share of investments at $131bn, with the majority in upstream projects. Total committed gas and power investments are approximately $106bn and $95bn respectively, followed by chemicals at $14bn. The GCC represents $171bn in committed investments, approximately 50% of the MENA total,'' it added.

A breakdown showed that Iraq emerged among the largest investors with $47bn as oil investments account for $27bn, followed by UAE at around $45bn, 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 $42bn for the outlook period, of which $14bn will be in the power sector. In Egypt, committed investments stand at around $39bn, with power-generation projects accounting for $18bn. Kuwait and Oman have committed $31bn each. Algeria has committed $12bn 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.


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