Middle East and North Africa with $525 billion Energy Investment 2012/2016 -- Outlook Mixed

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--With the Middle East's project pipeline filling with oil and gas, power and desalination projects, the region will drive the growth for a multibillion dollar turbomachinery and pumps industry, says Raj Menon, the general manager Arabian Reach, which is organizing of an exhibition in the sector to be held in Abu Dhabi in May 2012.

The Arab Petroleum Investment Corporation (Apicorp) (Damman, Saudi Arabia) reports that energy capital investments in the Middle East and North Africa (MENA) region could total $525 billion from 2012 through 2016. The Apicorp study shows the oil value chain accounting for 42% of investments in the MENA region, the gas projects will represent 34%, and the 24% balance will come from the oil- and gas-fuelled power generation sector.

More than 66% of the energy capital investment potential continues to be located in the same five countries that topped the list in the last review: Saudi Arabia, the United Arab Emirtes, Iran, Qatar and Algeria. Saudi Arabia heads the list with $141 billion, and the UAE has passed Iran to become the second largest investment destination with $76 billion of energy investment in the period.

International sanctions and the withdrawal of foreign companies have reduced Iran's energy investment to $58 billion. Qatar has also seen a downward trend .With a moratorium on further development of the North Field, energy capital investments have dropped to $41 billion.

"In the contexts of a global economic downturn and regional political turmoil, our review of MENA energy investment for the five-year period points to broken momentum, yet mixed outlook," Apicorp notes.

There are more challenges to the investment scene as the average energy project, which increased almost three times between 2003 and 2008, has resumed its upward trend after declining significantly in the middle of the global financial crisis," reported Apicorp.

The relatively moderate 12% upward trend underpinning the current review should not mislead, as the extent to which project costs are predictable depends on the outlook for the price of engineering, procurement and construction and its components.

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