Arab oil and gas producers are seeking $430bn in new investment from 2011 through 2015 to maintain output and meet expected demand as governments resume projects they delayed due to the financial crisis.
A recovery in consumption and higher crude prices will encourage investors to help revive some oil-related facilities and projects and to develop new ones, the Arab Petroleum Investments Corp, known as Apicorp, said in its annual review of Arab energy investment released on Sunday. Apicorp is an investment company owned by the Organization of Arab Petroleum Exporting Countries.
Arab producers are planning projects valued at $530bn over the five-year period, and they need $430bn in financing and investment beyond the amount they have already committed, Apicorp said.
Cancelled or postponed energy projects are likely to drop to 19 percent of the total foreseen for the region, compared with 29 percent estimated in last year’s review, it said. Tight credit remains a problem, and companies are relying now to a greater degree on equity to finance their energy developments, said Apicorp, based in Khobar, Saudi Arabia.
The average capital structure for the oil and gas supply chain is likely to be 57 percent equity and 43 percent debt from 2011 to 2015, the review said. By comparison, Apicorp’s review for 2009 to 2013 cited an average equity share of 54 percent, while the review it released a year earlier noted a 50 percent equity share.
Energy investment in the region will increase because of global demand and in spite of heightened uncertainty stemming from turmoil in parts of the Arab world, Apicorp said.