Middle East Infrastructure Projects Boom as OPEC Oil Exports Target $1 Trillion for 2008

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Researched by Industrial Info Resources (Sugar Land, Texas)--Oil export revenues earned by member countries of OPEC are set to reach a record total of over $1 trillion by the end of 2008 and continue on an upward trend into 2009, according to estimates by the U.S. Energy Information Administration. In the first seven months of 2008, OPEC members earned a record $642 billion for oil exports.

For Middle East OPEC member countries in the Gulf Cooperation Council (GCC), this continuing windfall is financing a construction boom as they diversify their economies, looking ahead to the middle of the century when the oil bonanza may have tapered off. Civil construction investment is forecast to top $330 billion by the end of this year, which would be ten times the investment put into the oil and gas industries, according to the organizers of Dubai's Big 5 construction exhibition, which will be held at the end of November. This steep rise in the civil construction sector has climbed from a 2006 total of $30 billion.

Another source, Business Monitor, has the total of Middle East real estate project investments for 2008 standing at $410 billion, with Saudi Arabia accounting for $270 billion of the total.

With the major focus on GCC countries, the Big 5 research partner Proleads (Dubai, United Arab Emirates) is reported to be monitoring 3,800 current construction projects in the region worth a total of $3.5 trillion. The investment is not only being made in infrastructure projects such as roads, airports and railways, but also in utilities such as power generation projects. Investment in power projects is projected to peak at $27 billion at the end of 2009, with hydro projects contributing $15 billion. For related news item see August 13, 2008 -- Bidding Difficulties Appear for Gulf Cooperation Council Countries as Project Capital Expenditure Ceiling Looms.

As part of the drive for power, Emirates Nuclear Energy Corporation is accepting bids for nuclear power projects up until the end of the first week in September and plans to award the first nuclear power project contract by the end of the year. This will assist in meeting the additional 22,000 megawatts (MW) of planned generating capacity, which will be required by the quickly developing economy of the region over the next seven years. Bechtel Group Incorporated (San Francisco, California) and WorleyParsons Limited (ASX:WOR) (North Sydney, Australia) are among the bidders for the nuclear power project, and Thorium Power Limited (OTC:THPW) (McLean, Virginia) is advising the United Arab Emirates on setting up an independent federal authority for nuclear regulation.

Bahrain is an example a GCC country that has shown a fast growth rate in power demand, having increased demand from 1,159 MW in 1998 to 2,234 MW in 2008. The growth rate in demand for power rose from 6% per year in 2006 to 12% in 2007. While increasing its power infrastructure, Bahrain, to keep the development income primed, will put $13 billion into the oil sector over the next 20 years. Exploration and production will take $8 billion, and a further $5 billion will go into a modernization program at Bahrain refinery, which first went into operation in 1936.

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