Investment nears $1tn as governments look to meet growing demand and expansion
The Middle East and North Africa (MENA) region is expected to commit an additional $574 billion worth of development over the next five years to critical energy projects, in addition to the $345 billion already committed to projects under execution.
This brings the total committed and planned investments up to $919 billion, as the region’s governments look to meet growing demand and demographic and urban expansions, a report by Arab Petroleum Investments Corporation (APICORP) has found. Of the planned $574 billion investments, the power sector accounts for the lion’s share worth $187 billion, while the oil and gas sectors will represent $169 billion and $150 billion respectively.
The remaining investments will be in petrochemicals, the MENA Energy Investment Outlook report said.
“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 $149 billion and $72 billion respectively, between 2018 and 2022, as both countries look to boost their upstream oil and gas sectors, it stated.
In other nations, the planned investments between 2018 and 2022 are estimated to be $72 billion in Egypt, $59 billion in Kuwait, $58 billion in Algeria, $37 billion in Iraq, $9 billion in Oman and $5 billion in Bahrain, the report added. The planned projects for the remaining GCC countries are poised to reach $57 billion for the period.
Projects under study represent by far the largest portion of planned investments, at $251 billion, while projects under contract bid amount to $92 billion, APRICORP’s research team said, adding that projects under design reach $86 billion.
The team added that it expects the MENA region to continue investing heavily as major energy-exporting countries expand the size of their energy sectors and strengthen their positions in global markets.
It is estimated that committed investments in energy projects currently under execution are estimated at $345 billion for the five-year period. The oil sector accounts for the largest share of investments at $131 billion, with the majority in upstream projects.
Total committed gas and power investments are $106 billion and $95 billion respectively, the report added, followed by chemicals at $14 billion. The GCC represents $171 billion in committed investments, which is approximately 50% of the MENA total, it said.