Arab Petroleum Investments Corporation Sees $900 bn Energy Investment in MENA Region in Next Five Years

Total committed and planned energy investments in the MENA region, including Iran, can reach $900 billion over the next five years, according to a new report published by the Arab Petroleum Investments Corporation (APICORP).

The multilateral development bank’s report, MENA Energy Investment Outlook – Big plans in uncertain times, states that $289 billion of investment has already been committed to projects under execution in the region, while an additional $611 billion worth of development is planned.

Leading the investment drive will be Saudi Arabia, along with the UAE and Kuwait, which will look to invest across the energy value chain. Iraq and Iran will play catch-up and are determined to push their ambitious oil and gas plans forward, but will face many above-ground challenges.

In North Africa, Algeria has vowed to pump billions into its upstream sector. Much is also expected in Egypt as recent gas finds promise to meet rapidly rising power demand. Renewable-energy projects will be at the forefront of efforts to meet rising power demand in Morocco, Tunisia and Jordan.

Despite the increasing investment plans within the MENA region, APICORP’s report also highlights several challenges and constraints that will prove pivotal over the medium term.

Global investments in the oil and gas sector are closely interlinked with oil prices. Although some MENA countries, including Saudi Arabia, Iran, the UAE and Kuwait, announced that they would go ahead with investment plans despite low prices, other countries with low fiscal buffers and competing pressures on its revenues, particularly Iraq, may have to reconsider their ambitious capacity-expansion programmes.

In addition, financing projects has become more challenging. Turmoil in the certain parts of the region will keep investments at bay in the near term. The report says regional instability is unlikely to recede in the immediate future.