The Middle East will need more help from international investors to keep the title of world’s biggest oil and gas producer because its remaining deposits are harder to get at.

Mr Mohamed Al Hamli oil minister of the UAE said that technology is the key to prolonging the life span of the reservoirs and we’ve been doing this with our partners for a long time. We are forced to go down the road of enhanced oil recovery and using more advanced technology.”

According to Wood Mackenzie Consultants, Exxon Mobil, Royal Dutch Shell Plc and other international oil producers will combine with state owned companies to spend $40bn in 2013 on developing resources in the Middle East up 18% on last year’s tally. Fields that require technology, such as steaming to extract heavy oil in Kuwait or stripping sulfur out of Abu Dhabi’s natural gas will attract much of that spending.

According to the International Energy Agency, demand for energy will grow faster in the Middle East over the next two decades than any region other than Asia. Rising consumption of crude oil and natural gas at home will put pressure on Saudi Arabia, the UAE and other governments to keep production high enough to maintain the export revenue that finance state spending.

Mr Iain Brown head of regional research at Wood Mackenzie said that Middle East countries have definitely produced most of their cheaper and easier oil. These are projects where national oil companies have greater need for support from international oil companies because the international oil companies have had more experience of these challenging conditions.”

The increasing expense of drilling oil has helped Brent crude futures, the benchmark price for about two thirds of the world’s oil, rise fivefold over the last decade. Brent oil for January traded as high as USD 109.48 per barrel today on the ICE Futures Europe exchange in London.

Mr Samuel Ciszuk a consultant for KBC Asset Management UK said that “A large driver in access to new reserves throughout the region will be Middle East states’ need for technology transfers. Private investment at a time when several of the countries experience sharply rising demand from their own populations for higher social spending is also an important factor.”

(Sourced from www.arabianbusiness.com)