Gulf oil projects put at $726bn

Hydrocarbon projects under way or are planned in the Gulf region were estimated at around $726 billion in February and a large part of them is in the upstream sector, according to a Kuwaiti financial institution.

The estimates in February are nearly $10 billion higher than those for January but lower than the value of $731 billion estimated in the first quarter of 2010, Markaz said in a study published this week.

The study said it covered the six-nation Gulf Cooperation Council (GCC) along with Iraq, Iran and Yemen, which control more than 60 per cent of the world’s extractable oil deposits and over a third of the global gas resources.

“The total value of the planned hydrocarbon projects in the Gulf region was estimated in February at around $726 billion, which represents an increase of about $10 billion since January 2011. In contrast, this figure stood at nearly $731 billion in the first quarter of 2010,” the study said.

It showed the number of planned major projects over the next decade in the GCC oil sector has significantly increased over the last year. It estimated the number at 684 projects compared to 637 projects during the first quarter of 2010.

“Several major projects in the petroleum sector are expected to be completed this quarter. The total value and number of projects to be completed is $11.4 billion and 17 respectively,” the study said.

It said Iran, which controls the world’s second largest oil reserves after Saudi Arabia, continues to lead the regional petroleum sector investment outlook in terms of number and value of projects.

“It is also interesting to note that the majority of the region’s outlook is heavily skewed towards the upstream oil and gas segment, except for Saudi Arabia which is almost equally distributed between all segments.” It said.

“A review of the petroleum sector’s major project time frame underscores that the majority of these projects have a short term horizon. In terms of timing, projects categorized as having a long term horizon account for 32 per cent of projects.”

The report showed that a number of projects have been brought forward to the short time-frame which accounts for 56.3 per cent of total projects.

The total value of canceled or on-hold projects slightly increased over the last month compared to January 2011, it said, adding that the number of projects canceled or on hold has also increased slightly.

It said the upstream oil and gas segment is most affected in terms of cancellations and projects being placed on hold.

But it noted that has been partly offset by the petrochemicals and refining segments which have seen a “revival” of a number of projects.

“It is also worth noting that petrochemical projects in Saudi Arabia have contributed significantly to the number and value of cancelled projects. One of the major projects that were expected to move on this quarter is Saudi Aramco- Ras Tanura Expansion Project which was valued at $eight billion.”

Citing government data, the report said Saudi Arabia has around 133 upcoming projects in the oil sector with an estimated value of $127.5 billion.

A breakdown showed the value of projects is estimated at nearly $220 billion in Iran, about $125 billion in Iraq, $120 billion in Saudi Arabia, around $100 billion in the UAE, $50 billion in Qatar and nearly $48 billion in Kuwait.

The rest covers Oman, Bahrain and Yemen.

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