MENA O&G Projects Market Outlook

The outlook for the oil and gas industry in the Middle East and North Africa (MENA) region looks positive buoyed by robust oil and gas prices.

Having been the backbone of the global energy system, the oil and gas producers in the region has contributed significantly in the world’s total oil and gas supply. Current crude oil production in the MENA region stands at approximately 30.4 million bpd, amounting to about 31% of the total oil produced in the world. Natural gas production is about 925 billion m3, roughly 23% of the total gas produced globally.

The region drives a surge in project spending in 2024 due to its strong financial position and high oil prices. Long-term investments for expansion of the upstream and downstream production capacity will continue in 2024.

The Arab Petroleum Investments Corporation expects MENA energy investments in oil, gas, petrochemicals and power to increase by 9% to more than $875 billion by 2028.

The region is expected to see growth in both oil and natural gas production with most volumes coming mainly from active and planned fields. Through to 2030, annual crude oil and condensate production is forecasted to increase by a CAGR of 0.89%.

The annual greenfield capital expenditure in offshore oil and gas will exceed the $100 billion threshold in 2024, led by mammoth projects in Saudi Arabia, Qatar and the UAE.

The petrochemicals segment will lead the Middle East oil and gas upcoming projects count during 2024-2028. The refinery and petrochemicals projects will constitute 66% of the total projects expected to commence operations during this period.

Saudi Aramco, the national oil company, plans to approve $100bn in projects and expand its oil production capacity by 1 million bpd to 13 million bpd by 2027, with most of the increase coming from offshore fields. It aims to raise gas production by 50% by the end of this decade.

The Dammam field is set to yield an additional 75,000 bpd this year, and the offshore Marjan and Berri fields are set to provide another 300,000 bpd and 250,000 bpd, respectively by 2025. The Zuluf field expansion is projected to add 600,000 bpd by 2026 and the Safaniyah development is set to increase production by 700,000 bpd by late 2027.

On the downstream side, Saudi Arabia’s petrochemical sector will see investments of upto $600bn by 2030. Aramco has a significant pipeline of planned projects, including petrochemicals projects estimated to be worth up to $200bn.

Abu Dhabi National Oil Company (Adnoc) has adopted a five-year business plan, which covers a capex budget of $150bn for 2023-27 and sets a target to achieve its oil production capacity goal of 5 million bpd by 2027 instead of 2030. Further, ADNOC will introduce low-carbon solutions and an international division centred on new energies, gas, LNG, and chemicals. Top projects include the $7bn expansion project at Abu Dhabi’s Upper Zakum offshore oil field and the $4.5bn Ruwais LNG Terminal project.

The world’s biggest gas exporter market, Qatar, is building massive LNG project worth $38bn. Six 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 by 2027. The country has also announced plans for a new LNG expansion project, the North Field West project, to further raise the LNG production capacity to 142 mtpa before the end of this decade, representing an increase of almost 85% from current production levels.

Outside of the GCC, Iraq has a growing projects market. Its National Investment Commission (NIC) has announced three investment opportunities in the oil refining sector worth nearly $25bn. Iran Oil Ministry has started completing 50 projects in the oil industry with a total investment of $47.5 billion to increase the country’s oil and gas output.

As the region pushes ahead with its long-term growth ambitions, abundant new opportunities are being offered in the oil, gas and petrochemicals sector.

Editor