Total energy investments in the Middle East and North Africa (MENA) could reach the $1tn mark over the course of five years.
This is in spite of qualms that have been perplexing the regional outlook, according to the latest edition of the MENA Energy Investments Outlook published by the Arab Petroleum Investments Corporation (APICORP).
While global investments in the industry continued their decline in 2016, down by 24% as compared to 2015, the MENA region is expected to see an increase of 7% in energy investment activity compared to data of the previous year.
Based on this evidence, the APICORP research team is cautiously optimistic for the MENA region, said a report by state news agency, WAM.
Governments continue to make investments in the energy sector a priority, and it is expected that a number of critical projects will be executed and completed successfully over the course of the next five years.
Plans for power projects are at the top of the five-year agenda in many countries.
A total of $337bn had already been committed to projects under execution at the end of the previous year.
With an additional US$622bn worth of developments in the planning stage, the committed and planned investments could add up to $959bn over a five-year period, compared to $900bn in 2015.
Planned investments increased by 2%, whereas committed investments increased by 17%.
This is said to represents the transition of some projects and investments from the planned to committed phase.
The total of $337bn of committed investments for the five-year period is divided into investments in the oil sector at $121bn, gas investments at $108bn, power investments at $91bn and chemicals at US$17bn.
The GCC represents $174bn in committed investments, more than 50% of the MENA total.
Among the $622bn worth of planned investments over a five-year period, the power sector accounts for the largest share at US$207bn.
The oil and gas sector will represent $195bn and $159bn respectively, with the remaining investments in petrochemicals.
The APICORP report reveals that, at $289bn, projects under study constitute the largest portion of planned investments.
Dr Raed Al-Rayes, deputy chief executive and general manager of APICORP, said, "Having recently witnessed one of the biggest drops in history, investments in oil and gas are still struggling to recover on a global level.
“However, there are clear signs for an upturn, and we have found that energy investments in the MENA region over a five-year period are ahead of the trend."
Emirates News Agency (WAM)