APICORP predicts drop in planned MENA investments
The Arab Petroleum Investments Corporation (APICORP) has estimated that planned and committed investments in the MENA region will exceed $792 billion over the next five years - a decline from the $965 billion in last year’s five-year outlook.
The overall drop in the investment outlook – mostly in planned investments – is largely attributed to the 2020 triple crisis: the COVID-19-related health crisis, oil crisis and a looming financial crisis.
In terms of planned investments, the biggest gain was in the gas value chain, which jumped by $28 billion, a 13% increase compared to last year’s outlook. The increase signals the developing of unconventional gas in the GCC, namely in Jafura and Hail gas fields in Saudi Arabia and Ghasha in the UAE, as well as the increasing production capacity in Qatar, Egypt and Oman.
In the petrochemicals sector, APICORP expects countries to consolidate their respective strategy in order to increase monetization and maximize value from the hydrocarbons they produce. Key investments in this sector include Duqm ($8.67 billion) and Sur ($6.73 billion) in Oman; Al-Zor ($6.5 billion) in Kuwait; SATORP Amiral ($6.34 billion) in Saudi Arabia; and the QCHEM Complex ($4.5 billion) in Ras Laffan in Qatar.
The power sector meanwhile registered a $114 billion decline in investments due to the commissioning of several projects during 2019 in Egypt, UAE and Saudi Arabia. Globally and in the region however, utilities’ share prices did not fall as much as their counterparts in the oil and gas sector. This was due to a relatively milder decrease in demand for electricity and government utilities subsidies in select countries.
