Emirates Business reported that GCC based oil firms plan massive upstream investments worth USD 365 billion in the oil and gas sector in the near future.
Mr Peter C Venn regional director for Oil and Gas, SAS Middle East and Africa said that "In addition to multibillion dollar investments, the region's oil and gas players are undertaking plans to expand the market through a massive investment worth USD 365 billion. This reflects how oil and gas remain a very important economic driver and a critical resource for the region's economy."
Mr Venn said that these projects are being planned keeping in view the rising consumption in India and China.
He said that "It's simple logic. Families in these countries are moving from not having a car to having a car. When the world's cheapest car Nano was launched in India, there were 60,000 bookings on a single day. And that happened amidst the recession."
An SAS communiqué said that besides, development and exploration investments valued at more than USD 196 billion are already being undertaken across the GCC.
Mr Venn said that these upstream oil investments in GCC states remain a major attraction for various downstream firms across the world. Many national oil companies in the Middle East are capitalizing on the lower construction materials and engineering costs and are now more open to adopting technology-driven solutions to power their development and exploration investments.
Industry insiders have repeatedly pointed out that several upstream and downstream oil projects in the GCC were awarded when construction costs subsided by about 20%. Costs of steel, cement and other construction materials are still substantially low as compared to the 2008 peaks.
Mr Robin Mills a Dubai based oil economist said that the increased confidence among GCC based oil producers comes from the rise in oil prices and therefore a perceived hike in demand. He said that "The OPEC oil producers see a hike in demand some years down the line and are therefore investing in new projects. The recent hike in prices has given them added confidence."
(Sourced from Emirates Business)
