UAE leads energy investment
With the UAE pressing ahead with a plan to boost crude oil production capacity to 3.5 million barrels per day (bpd) by 2017, the country retained its position in the Middle East as the biggest spender in oil and gas sector.
In the second quarter, the UAE continued to lead the Mena region in value of contracts awarded in the oil and gas sector with Zakum Development Company awarding a huge $3.7 billion contract on the development of the offshore Upper Zakum field.
The contract is more than 50 per cent of the total $6.7 billion worth of engineering, procurement and construction (EPC) deals awarded so far in the region in the second quarter of 2013, according to Middle East projects trackers Meed Projects.
With plans under way to spend $40 billion on oil and gas projects between 2010-2014, the UAE already ranks as the largest investing country in the field in the Gulf region where the total value of oil and gas projects between 2010-14 totals $75 billion.
The UAE, the world’s third biggest oil exporter, plans to increase its crude oil production capacity to 3.5 million bpd by 2017 as world oil demand is expected to increase to 105 million bpd by 2030 and even up to 112 million bpd according to optimistic scenarios, according to UAE Energy Minister Suhail bin Mohamed Faraj Faris Al Mazrouei.
In June, the UAE’s average oil output was unchanged from May at 2.73 million bpd, latest data from the Paris-based International Energy Agency showed.
According to Meed, the ground-breaking Upper Zakum Field Development project has a total budget of around $ 15.6 billion.
“These developments mark a critical stage in the UAE’s push to expand its offshore output to new fields. Equally important, however, is the country’s push to optimise oil production, sustainability and innovation through successful integration of new and expanding projects,” Meed said in a statement.
“One of the key factors that has a significant impact on successful project execution and commissioning is the integration of oil and gas project infrastructure with technology. This conference aims to bring the entire value chain involved in the oil and gas projects sector together to discuss challenges and solutions for new projects in the UAE and the way forward. We hope encourage co-operation within the sector to boost the quality of projects execution,” said Edmund O’ Sullivan, chairman of Meed Events, organisers of the upcoming UAE Oil and Gas Greenfield Projects Conference, which will gather high level participation from government and semi-government entities, financiers and investors, contractors, project managers and international operators and developers.
According to Meed Projects, if contracts are awarded as expected, the second quarter could be the biggest-spending period since the final quarter of 2011, with several major projects moving towards the construction phase. Since then, contract awards for each subsequent quarter have hovered between $5 billion and $10 billion, with spending dominated by Saudi Arabia, UAE, Iraq and Iran.
The only other billion-dollar-plus contract in the Mena region so far in the second quarter was Qatar Petroleum awarding a deal to Taiwan’s CTCI and Japan-based Chiyoda Corporation, This was for the $1.2 billion expansion of its Ras Laffan refinery.