The report says that ME regional oil use of 8.24mn b/d in 2001 rose to an estimated 10.61mn b/d in 2007. It should average 10.86mn b/d this year and then rise to around 11.84mn b/d by 2012. Regional oil production was 22.87mn b/d in 2001, and in 2007 averaged an estimated 25.56mn b/d. It is set to rise to 28.94mn b/d by 2012. In terms of natural gas, last year the region consumed an estimated 371bcm, with demand of 542bcm targeted for 2012, representing 46 per cent  growth. Production of an estimated 368bcm in 2007 should reach 576bcm in 2012 (+56 per cent), which implies net exports rising to 34bcm by the end of the period. Last year, Saudi Arabia consumed an estimated 20.75 per cent  of the region’s gas, with its market share forecast at 17.97 per cent  by 2012. It contributed an estimated 20.90 per cent  to 2007 regional gas production and, by 2012, will account for 16.91 per cent  of supply.

BMI now forecast Saudi real GDP growth at 4.3 per cent  for 2008, following an estimated 2.9 per cent  in 2007. “We are assuming 4.5 per cent  growth in 2009, 4.1 per cent  in 2010, 4.4 per cent  in 2011, followed by 4.2 per cent  in 2012. We expect oil demand to rise from an estimated 2.07mn b/d in 2007 to 2.37mn b/d in 2012, representing 3.0 per cent  annual growth that lags our underlying economic assumptions,” it adds.

The report says that gas production should reach 97.4bcm by 2012, up from an estimated 77bcm in 2007. Consumption will match the trend, leaving Saudi Arabia with no import requirement or export potential during the period. “Between 2007 and 2018, we are forecasting an increase in Saudi oil production of 25.6 per cent, with volumes rising steadily to 13.5mn b/d by the end of the 10-year forecast period. Oil consumption between 2007 and 2018 is set to increase by 37 per cent , with growth slowing to an assumed 3.0 percent  per annum towards the end of the period and the country using 2.83mn b/d by 2018.

Gas production is expected to rise from 77bcm to 119bcm by the end of the period. “With 2007-2018 demand growth of 54 percent , this provides a balanced market throughout the period,” it says.

Meanwhile, according to an economic report issued by the Federation of Gulf Cooperation Council (GCC) Chambers of Commerce and Industry in June Saudi Arabia is planning to invest $80 billion in increasing its oil output to 12.5 million barrels per day and expanding its refining capacity by 43 per cent to six million bpd within the next few years.

The report expects that the gross GCC domestic product will grow by 27.9 per cent this year to reach $1 trillion with the increase in oil prices.The federation believes that Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain and Oman will achieve a 31.2 per cent surplus in their current accounts in 2008.

habib@khaleejtimes.com