Middle East O&G Opportunities
The Middle East oil and gas sector has seen a resurgence in project spending in 2021 after a slower progress throughout 2020 due to the Covid-19 pandemic.
The regional market is now continuing on a rising trend. National oil and gas firms are diversifying investments into new technologies and fuels in response to the global energy transition. New policy focus is on conserving hydrocarbons reserves and on reducing greenhouse gas (GHG) emissions.
About $201.6bn of upstream and downstream projects are under execution in Mena. A steady flow of capital expenditure towards upstream oil schemes will lead to a significant expansion of the oil production capacities. More than $200bn investment is expected into new refining and petrochemicals ventures in the GCC by 2025.
Some of the major oil & gas schemes ongoing in the region are from the biggest projects market of Saudi Arabia and UAE.
The $20bn Marjan Oilfield Development Project in Saudi Arabia is expected to add 300,000 barrels per day (bpd) of Arabian Medium crude production from the field, apart from producing 2.5bn standard cubic feet per day (bscfd) of gas and 360,000 bpd of ethane and natural gas liquids (NGL). The UAE’s $15bn Hail and Ghasha Sour Gas Field Development Project aims at producing up to 1.5 bscfd of sour gas plus additional condensate. The project is intended to increase the UAE’s domestic gas production by 18%.
The other major projects in the UAE include $21.8bn Upper Zakum Production Capacity Enhancement and $20bn Ruwais Refinery Expansion. Zadco is now looking to increase production from the Zakum field from 750,000 bpd to around 1 mbpd by 2024. In 2018, Adnoc announced plans to add a third refinery of capacity 600,000 bpd in Ruwais Refinery Complex, as part of a $45bn downstream development investment to develop flexibility in refining and processing other grades. The new grassroot refinery will bring capacity of the entire complex to a total capacity of 1.5 mbpd - making it the largest in the world.
Iraq ranks as the fourth-biggest project market in the region with more than $373bn worth of projects planned or underway. Major ongoing schemes include $18bn Zubair Oil Field Expansion Project with the aim to increase production to 700,000 bpd, and $17.2bn Basra Gas Gathering Project, a part of the Iraqi Gas Master Plan, which will rapidly increase development of Iraq’s associated gas resources. The project is looking to produce 2 bscfd of gas flared primarily from Rumaila, Zubair and West Qurna-Phase 1 oil fields.
The world’s biggest gas exporter market, Qatar has planned massive investment in the LNG programme. 6 new LNG trains are being installed at Ras Laffan with the intent to produce an additional 37.2 mtpa of LNG from the site. This will increase Qatar’s total production capacity from 77 mtpa to 126 mtpa.
As the region pushes ahead with ambitious plans to diversify and expand its economy, abundant new opportunities are on the cards for companies working in the oil, gas and petrochemicals sector.