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Apicorp, which focuses on the energy sector, recently released its annual energy investment outlook report, predicting that despite uncertainty, the scale of energy investment in the MENA region of the Middle East and North Africa will be close to $1 trillion
in the next five years.
According to the report, the scale of investment in project implementation is about $345 billion, and the investment in increasing project development will reach $574 billion
.
The overall economic outlook is similar to the year-ago forecast, with growth expected to be around
3.
2 percent in 2018 and 2019.
The report pointed out that the increase in investment in the global energy sector will lead to an improvement
in investment in the MENA region.
Saudi Arabia is expected to lead regional energy investment at $149 billion
over the next five years.
It is followed by the UAE country, which is expected to invest US$72 billion, accounting for 38%
of the regional total.
This is mainly because both countries want to boost the oil and gas industry
.
At the same time, Egypt's energy investment will also reach $72 billion over the next five years, with a focus on increasing natural gas production and meeting the growing demand
for electricity.
Kuwait plans to invest $59 billion in the same period, with the oil sector accounting for more than 50 percent
.
Kuwait plans to increase oil production to 4 million b/d
in the coming years.
Similarly, Algeria plans to invest in about $58 billion in projects, of which the development of oil fields around Messaoud accounts for a large part
of upstream oil investment.
The country will seek to invest in upstream oil and gas to reach the target
of a 20 percent increase in production.
However, low fiscal buffers and competitive pressure on revenues may affect Algeria's efforts
to implement its capacity expansion plan.
In addition, other major investments in the oil and gas sector will be made in Iran, where $67 billion is expected to be planned in the coming period, compared with $47 billion
in Iraq.
However, the outlook for these countries is uncertain and the level of political risk is higher
.
On the other hand, there are three main challenges that could hamper the growth of
energy investment in the region.
First, global investment in the oil and gas sector is closely linked to oil prices, and while the overall picture is improving, prices are not expected to return to the high levels
that preceded the sharp decline in 2014.
Another challenge is the rising cost of capital, as some governments will find it difficult to attract foreign investment
.
However, due to its high reserves and low debt-to-GDP ratio, the GCC successfully issued a record debt of more than $50 billion in 2017, surpassing the record $37 billion
in 2016.
Saudi Arabia represents the majority of that, with debt rising by more than $21 billion, followed by Abu Dhabi and Kuwait at $10 billion and $8 billion
, respectively.
Oman and Bahrain also had international debt of $8 billion and $3 billion
, respectively.
Third, the regional geopolitical environment remains fragile, with ongoing conflicts in the region creating instability, discouraging investors and causing investors to be cautious
about investing in the region as a whole.
2017 though saw improvement and rebalancing
of the region.
The period of economic growth and weak oil prices seems to be over, but the recovery phase will take longer and is not without its challenges
.
With oil revenues falling, the GCC government announced an expansionary budget after several years of tightening spending and will prioritize key investments in
its energy sector.
Apicorp, which focuses on the energy sector, recently released its annual energy investment outlook report, predicting that despite uncertainty, the scale of energy investment in the MENA region of the Middle East and North Africa will be close to $1 trillion
in the next five years.
According to the report, the scale of investment in project implementation is about $345 billion, and the investment in increasing project development will reach $574 billion
.
The overall economic outlook is similar to the year-ago forecast, with growth expected to be around
3.
2 percent in 2018 and 2019.
The report pointed out that the increase in investment in the global energy sector will lead to an improvement
in investment in the MENA region.
Saudi Arabia is expected to lead regional energy investment at $149 billion
over the next five years.
It is followed by the UAE country, which is expected to invest US$72 billion, accounting for 38%
of the regional total.
This is mainly because both countries want to boost the oil and gas industry
.
At the same time, Egypt's energy investment will also reach $72 billion over the next five years, with a focus on increasing natural gas production and meeting the growing demand
for electricity.
Kuwait plans to invest $59 billion in the same period, with the oil sector accounting for more than 50 percent
.
Kuwait plans to increase oil production to 4 million b/d
in the coming years.
Similarly, Algeria plans to invest in about $58 billion in projects, of which the development of oil fields around Messaoud accounts for a large part
of upstream oil investment.
The country will seek to invest in upstream oil and gas to reach the target
of a 20 percent increase in production.
However, low fiscal buffers and competitive pressure on revenues may affect Algeria's efforts
to implement its capacity expansion plan.
In addition, other major investments in the oil and gas sector will be made in Iran, where $67 billion is expected to be planned in the coming period, compared with $47 billion
in Iraq.
However, the outlook for these countries is uncertain and the level of political risk is higher
.
On the other hand, there are three main challenges that could hamper the growth of
energy investment in the region.
First, global investment in the oil and gas sector is closely linked to oil prices, and while the overall picture is improving, prices are not expected to return to the high levels
that preceded the sharp decline in 2014.
Another challenge is the rising cost of capital, as some governments will find it difficult to attract foreign investment
.
However, due to its high reserves and low debt-to-GDP ratio, the GCC successfully issued a record debt of more than $50 billion in 2017, surpassing the record $37 billion
in 2016.
Saudi Arabia represents the majority of that, with debt rising by more than $21 billion, followed by Abu Dhabi and Kuwait at $10 billion and $8 billion
, respectively.
Oman and Bahrain also had international debt of $8 billion and $3 billion
, respectively.
Third, the regional geopolitical environment remains fragile, with ongoing conflicts in the region creating instability, discouraging investors and causing investors to be cautious
about investing in the region as a whole.
2017 though saw improvement and rebalancing
of the region.
The period of economic growth and weak oil prices seems to be over, but the recovery phase will take longer and is not without its challenges
.
With oil revenues falling, the GCC government announced an expansionary budget after several years of tightening spending and will prioritize key investments in
its energy sector.