The Persian Gulf states need to pump $523 billion over the next 25 years in exploration and production to meet a steady growth in global demand, according to the Abu Dhabi-based Emirates Centre for Strategic Studies and Research in a new book.
But such investments could be hampered by ambiguity about world oil consumption, uncertainty in war-ravaged Iraq and socio-political turmoil in Saudi Arabia and other regional oil heavyweights.
“Annual spending in this sector has to rise from an estimated 12 billion dollars at present to 23 billion annually in the last decade of the mentioned period,” it said in its book, “[Persian] Gulf Oil After the War on Iraq — Strategies and Policies.”
It estimated the cost of adding one barrel of oil a day to existing crude output capacity in the Middle East at 4,600 dollars compared with a world average of 10,200 dollars and as much as 22,000 dollars in the North Sea.
Besides upstream projects, Persian Gulf states need to invest 99 billion dollars to expand their refining production capacity from around six million bpd in 2002 to 10 million bpd in 2010 and nearly 15.6 million bpd by 2030, according to the book.
“There are doubts surrounding oil investments in the Middle East and this creates ambiguity about the future of crude supplies from the region,” the study said.