$859b energy projects in Mena as global demand rises
The expansion in demand for petroleum and petrochemicals in particular is driving downstream investment across the Mena region.
Dubai - IEA in monthly report, however, warns on slower growth in oil market on global economic concerns
Oil, gas and petrochemical projects, valued at more than $859 billion are either underway or planned in the Middle East and North Africa, of which $283 billion are projects are being implemented, as the region gets ready to meet the forecast increases in demand for energy over the next two decades.
According to industry forecasts, global oil demand will increase by at least 10 million barrels per day by 2040, while natural gas demand is set to grow by 40 per cent and petrochemicals by 60 per cent. The expansion in demand for petroleum and petrochemicals in particular is driving downstream investment across the Mena, says dmg events, organisers of the Abu Dhabi International Petroleum Exhibition (Adipec).
Christopher Hudson, president of dmg events, said: "Breakthrough technologies, the growing global population and rising consumer spending are all combining to create new demand for energy, much of which will continue to be met by the oil and gas industry up to and beyond 2040."
"While producers in the Middle East continue to maximise value from existing fields, there is heightened interest in developing new resources, both offshore and onshore, as well as investing in upgrading and diversifying both infrastructure and products downstream to create new products lines and revenue streams."
Adipec 2019 will run from November 11-14 at the Abu Dhabi National Exhibition Centre.
IEA flags uncertainty
However, concerns over the health of the global economy, marked by the US-China trade dispute, forced the International Energy Agency on Friday to lower its growth forecast for oil demand for 2019 and 2020.
"There have been concerns about the health of the global economy expressed in recent editions of this report and shown by reduced expectations for oil demand growth," the Paris-based agency said in its monthly report. "Now, the situation is becoming even more uncertain: The US-China trade dispute remains unresolved and in September new tariffs are due to be imposed."
"Tension between the two has increased further this week, reflected in heavy falls for stock and commodity markets. Oil prices have been caught up in the retreat."
It also noted the International Monetary Fund's recent downgrading of its economic outlook.
The IEA thus revised downwards its estimates for growth in global oil demand for this year by 0.1 million bpd to 1.1 million bpd. For 2020, growth was also predicted to be slightly down, by 50,000 bpd to 1.3 million bpd.
It warned "the outlook is fragile with a greater likelihood of a downward revision than an upward one", and noted growth was already "sluggish" in the first half of the year.
However, it noted that the market balance has been tightened slightly in the short-term by a reduction in supply from Opec countries.