Eight in ten oil and gas professionals in the Middle East and North Africa region are optimistic about the sector’s growth this year amid expectations of increased expenditure, a survey shows.
The 83 per cent figure is higher than last year’s 63 per cent and this year’s world average of 76 per cent, according to a survey from DNV GL, a technical adviser to the energy industry. The study, conducted between October and November 2018 and released on Tuesday, polled 791 senior industry professionals.
“This research shows the industry in the Middle East and North Africa gearing up to dominate global oil and gas production for decades to come,” said Ben Oudman, regional manager, Continental Europe, Middle East, East Africa and India, at DNV GL, Oil & Gas.
“It aligns with DNV GL’s September 2018 Energy Transition Outlook forecasting that more than half of conventional onshore oil production and the majority of offshore oil production will come from here.”
National oil companies in Mena, particularly in the Arabian Gulf, are ramping up spending as they seek to boost oil and gas output and increase refining and petrochemical production capacities.
State-owned Abu Dhabi National Oil Company plans to spend Dh486 billion over the next five years as it implements projects aimed at increasing oil output capacity to 4 million barrels of oil per day by 2020 from about 3 million bpd now. Abu Dhabi is also aiming to become self-sufficient in gas production, while at the same time boosting its petchems and refining capacities.
Mena oil and gas professionals’ optimism regarding their own organisations has also risen - to 85 per cent in 2019 from 78 per cent last year, second only to China’s 92 per cent, DNV said.
Eighty-three per cent of respondents expect their companies to increase or maintain their capital expenditure in 2019, the highest level of confidence among all regions surveyed by DNV.
About two-thirds of professionals said their organisations will favour projects that are adaptable within shorter time-frames.
“DNV GL has previously suggested that greater supply of oil and gas from Mena in coming decades will be driven by large-scale, low-cost production with operators responding to growing relative abundance by asserting competitive advantage,” the company said. “The technical adviser argues that realising this huge opportunity will involve companies maintaining focus on costs while making the massive investments required to meet anticipated demand.”
More than half of respondents said their companies will be able to achieve high profitability in the next decade, up from 39 per cent in 2018.
Nearly 90 per cent of the professionals expect cost controls to increase or stay the same, compared to 82 per cent last year.