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MENA oil producers may fall short on $100bn plan

Monday, 20 February 2012 | 00:00
Middle East and North African oil producers may fall short of a $100bn-a-year investment target set by the International Energy Agency to meet global demand by 2035, according to Arab Petroleum Investments Corp.
“It is far from certain that such levels, which are comparatively higher that those resulting from our own review, will be forthcoming; neither in the medium term nor in the longer term,” Ali Aissaoui, senior consultant at the inter-governmental energy lender, known as Apicorp, said in a report released on Friday.
Oil producers in the region will invest $525bn on energy projects from this year through 2016, Dammam, Saudi Arabia-based Apicorp said in a separate report last month.
Countries in the region can finance the projects on their own as long as the basket of OPEC crude oils stays above $90 a barrel, it said. It was at $118.13 on Thursday, according to data compiled by Bloomberg.
Conservative depletion policies, constraints on financing, international economic sanctions, higher perceived risks stemming from political instability, and durable loss of production due to conflicts may contribute to lower-than- necesary investment over the medium term, Aissaoui said in the report.
“Core producers” such as Saudi Arabia, the UAE, Qatar, and Algeria are not affected by the region’s turmoil and are “able to pursue, unhindered, their planned investment programmes,” he said.
Source: Bloomberg
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