The UAE and other Middle East oil heavyweights need to pump nearly $100 billion into their hydrocarbon sector in five years to expand their production capacity of oil and gas and meet a steady growth in global demand, according to independent estimates.But most of them could find difficulty in securing such massive investments as they are reeling under financial strain, while oil prices could weaken in the medium and long term and international companies remain reluctant to finance such projects because of their past bitter experiences with regional governments.
Between now and 2007, the world's five leading oil powers - the UAE, Saudi Arabia, Kuwait, Iraq and Iran - will have to pump an average $18-$20 billion a year into expansion projects to more than double their output to around 42 million barrels per day."This expansion is essential to meet the expected growth in world oil demand, which is forecast to rise by around 45 million bpd to over 120 million bpd by 2025," said Nicholas Sarkis, director of the Paris-based Arab Petroleum Research Centre (APRC). "The increase means that the share of those producers will rise from 28.4 per cent in 2002 to 35 per cent in 2025, while their share of worldwide natural gas production will jump from 12.4 to 20 per cent," said Sarkis in the Centre's bulletin. But he stressed such investments remain contingent on two major conditions, that political stability is restored following the end of the war in Iraq and the necessary investments are channelled into oil and gas projects and not other sectors. "Given the chronic shortage of domestic financial resources in those countries, they urgently need to attract foreign capital... but this has not always been readily available in recent years due in particular to political instability in the region, state oil and gas monopolies, and mergers among the large international banks... the merger of two banks has not resulted in the merged bank lending twice the amount," said Sarkis, whose Centre advises Arab governments on hydrocarbon issues. http://www.pakistaneconomist.com/page/c-issue/news6.htm
