Middle East is building a big lead in global hydrocarbon investments

Al-Monitor Pro Members

Gerald Kepes 

President, Competitive Energy Strategies, LLC

Aug. 24, 2022

Global upstream oil and gas investment has fallen sharply since 2013, and while the lows of 2020-2021 will not be sustained, higher levels of investment are extremely unlikely. Yet while a clean energy future without fossil fuels assumes the end of exploration and production (E&P) activity, it is doubtful that it will happen anytime soon. Across the globe, oil and gas companies (including national oil companies) and their stakeholders have sharply differentiated strategic beliefs regarding their future. Many of these companies will persist. They will try to survive, operate and invest. Investment will take place (and is taking place), but in a much more concentrated fashion, in a smaller number of basins (areas that contain oil and gas) at a lower level of E&P spend. The MENA region possesses a number of the most attractive hydrocarbon basins worldwide, and if it makes the necessary changes, can attract a larger percentage of global E&P expenditure and capture a higher focus within the portfolios of companies able to invest and benefit from expenditures of scale.