“To meet this growing need for funding, we have to continue, and even increase, investment in the oil industry to ensure market stability in the short and long term”.
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Naimi said that over the next decade, Arab countries, which hold 56 percent of proven global crude reserves and 27 percent of gas deposits, would need to invest around United States dollars 700 billion in energy projects to boost production.
The cartel’s decision a year ago not to cut production, sharply accelerated the collapse in prices which are now hovering around $45 a barrel, down from $115 a barrel in June 2014. Its economy is intricately linked to that of Saudi Arabia and its larger neighbor’s petroleum sector, as it refines large volumes of Saudi crude as well as receiving half the revenue from oil sales from one of Saudi Arabia’s biggest offshore fields under a 1950s-era treaty.
The substantial drop in oil price since last autumn from over $100 per barrel to $65 has put pressure on GCC budgets – Bahrain included, which expects to run a deficit of around 12 percent of GDP in 2016.
Saudi Oil Minister Ali al-Naimi called for sustained investment in new output capacity today despite the slump in world prices. Russia’s Energy Minister Alexander Novak is not sure that the meeting between OPEC member-states and non-members will take place on December 3-4.
But the undersecretary of the UAE’s energy ministry Matar Hamed al-Neyadi defended OPEC’s policy to safeguard its market share rather than support prices.
“Demand will pick up and supply will flatten out, given the lack of investment, so the price will be supported”, he told a petrochemical conference in Dubai. “I’m not negative forever on oil”, he said.
Still, Adsani said he expected oil prices to remain volatile in coming years, with much depending on how quickly USA shale production responded to rising prices and on the extent to which lower investment elsewhere downgraded crude production capacity.
He also said he expected competition between Opec producers and non-Opec producers to continue. “It is also important to note the role played by APICORP in giving priority to successful and developing joint Arab projects, and energy projects that adopt advanced technology and to the training and development of Arab talents and doing everything that will enable it to play an important and influential role in the future of the Arab energy industry”, Al-Naimi said.
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“So we need to add five million bpd to replace the natural reduction in output”, Bin Ali Marza told the Apicorp Energy Forum in the Bahraini capital of Manama. Of that sum, $50 billion has already been allocated to the Zour refinery project, a clean fuels project, for upstream work and for petrochemicals projects, he said.
