The Middle East and North Africa (MENA) region will see a number of critical energy projects pushed through in 2017, despite uncertainties that cloud the investment outlook.
While $337bn has already been committed to projects under execution, an additional $622bn-worth of development has been planned for the next five years.
Leading the drive will be Saudi Arabia, which – along with the rest of the GCC – will invest across the energy value chain. Iraq and Iran will play catch-up and are determined to push their ambitious oil and gas plans. Investments in Iran are starting to flow back after years of sanctions, but there will be many above-ground challenges.
In North Africa, Algeria has vowed to pump billions into its upstream sector. Much is also expected in Egypt, as recent gas finds promise to meet rapidly rising power demand. But there will be many challenges as low oil prices, the uncertain economic outlook, regional instability and conflicts all have an impact on planned investments.
The power sector accounts for the largest share of investments, at $207bn. The oil and gas sector will represent $195bn and $159bn respectively, with the remaining investments in petrochemicals. Projects under study represent by far the largest portion of planned investments, at $282bn. But, given the current investment climate and uncertain outlook, APICORP does not anticipate that all projects in this phase will actually move to the execution phase. In its view, contracts at the design and EPC phases are more likely to materialise in the medium-term. Projects at the EPC phase amount to $125bn, while those at design reach $78bn.
