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Energy Investments in the GCC to Reach $272 Billion by 2015

Middle East : 10 November 2010

Members of the Gulf Cooperation Council are planning to invest $272 billion into energy by 2015, according to the GCC Energy Working Group chairman.

Majid Abdullah Al-Moneef stated that $111 billion of these funds will be put into both upstream oil sectors and those downstream, as well as $108 billion into the gas value chain.

The balance of $53 billion is marked for investment in water and power throughout the area, stated Al-Moneef.  The chairman is also involved as a member within the Saudi Arabian Consultative Assembly, specifically in the committee of economic affairs and energy.

He noted that the investment levels are set to answer global demand, as well as local consumption and the drive for diversity within the energy sector.

Oil production within the GCC nations is set to increase, reaching 1.6 million bpd (barrels per day) by 2015.  Excess capacity with the regional area is currently around 5 million bpd and expected to stay at that level for that time period.

After 2030 production would decrease and fall between 2 and 2.5 million bpd, stated Al-Moneef.  These production figures include the six member states of Saudi Arabia, the UAE, Oman, Kuwait, Qatar and Bahrain.

The price of oil dropped slightly this week as the dollar strengthened and the Euro declined.  These shifts are due to a renewal in worries about debt loads in Europe and have knocked oil from its peak of over $87 per barrel, a two-year high.

Budgetary difficulties in Ireland had investors concerned and other weaknesses with the Euro zone were blamed for the currency decline.  The job market figures released in the US last week painted a positive picture and allowed the greenback to grow stronger compared to an indexed basket of currency.

Earlier this month the dollar dropped against the Euro, hitting a low not seen in 9.5 months thanks to the Feds announcement regarding the central bank.  The buyback plan involves $600 billion in Treasuries set to be acquired by the central bank by the middle of next year in a bid to push interest rates down and boost the lethargic economy.

December delivery of crude in the US dropped 30 cents to land at $86.55 per barrel late afternoon on Monday.  This is a decline from the midday high of $87.49, which was a peak not seen since October 9, 2008 when prices hit $89.82 per barrel.  The oil rollback on Monday was stopped before the low seen on Friday of $85.96 was reached, as noted by a broker.

Friday’s US crude prices helped record five consecutive increasing settlements and marked a 6.6 per cent weekly gain, the largest increase of that period since the week including February 19.

ICE Dec. Brent crude dropped 11 cents to reach $88 per barrel.

In Sana’a, a separate meeting between the Deputy Minister for Yemen’s Technical Education and Vocational Training department, Alawi Ba-Faqih, and the Saudi Fund for Development’s delegation headed by officials of the Technical Department was held.

The two parties had discussions centering on the achievement levels within the projects throughout the region’s technical and vocational institutes.

Andrew Reid, Staff Writer, Gulf Jobs Market News
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