UAE, Oman, Egypt and Pakistan’s energy ministers discussed energy opportunities and collaboration at the Ministerial Panel on the first day of the Abu Dhabi International Petroleum Exhibition and Conference 2017 with gas presenting attractive opportunities driven by increasing demand.
At the base of future energy opportunities is the oil price and 24 countries that have agreed to an OPEC-led plan to bring inventories to their five-year average.
The Organization of the Petroleum Exporting Countries and allied non-OPEC producers including Russia agreed to cut output by about 1.8 million barrels per day from Jan. 1, and extended the existing six-month supply cut to end of March 2018. OPEC will review policy at a Nov. 30 meeting in Vienna where experts expect the production cut to be extended to the end of 2018.
“This group of responsible countries did something remarkable and I think they would continue to do what it takes to take us to the next level,” said H.E. Suhail Al Mazrouei, Minister of Energy and Industry, UAE. “We’re still 158 million barrels above the average, which means there is a potential for an extension.”
Al Mazrouei said he was hopeful for an agreement that would lead to a more stable market and continued investments in oil and gas. He added that the healthy oil price level is no longer determined by NOCs by production management but by the levels of investment needed for the industry to flourish.
UAE’s state-owned oil and gas group Abu Dhabi National Oil Company recently announced that it would open up opportunities for partnerships. Al Mazrouei said the country is looking for partnerships which are fair, competitive long-lasting.
“I think there is a new wave of newcomers as this is a competitive market as well,” he said, adding that more projects are anticipated with countries who were historically producers and are now consumers such as Japan, Korea, China and India. “We want to see two ways partnerships, where we give them opportunity to invest and we invest with them,” he said.
H.E. Mohammed Hamad Al Rumhy, Minister of Oil and Gas, Oman said LNG is playing a growing role in and around the region with countries from Jordan to Japan building receiving terminals, including producing and new emerging countries such as Pakistan.
“Things are changing very fast and its becoming an important market. The challenge has been to find enough gas and our project Khazzan will play a big role in this,” Al Rumhy said.
BP announced in September it began production from Oman’s oil field Khazzan - the largest of the seven projects it is bringing online this year, which is operates in a partnership with Oman Oil Company Exploration and Production, with phase one of the Khazzan development made up of 200 wells.
Meanwhile, Pakistan’s Minister of State for Petroleum, Jamal Kamal Khan said the country has a significant consumption of energy with the country’s GDP growth anticipated at 6.5 per cent in the coming year. This is opening up farm-in opportunities for oil and gas investors, he said.
“We’re opening our first LNG terminal, with the next terminal to be commissioned in coming months, with two more in coming years. We haven’t covered the whole energy sector - gas and power needs haven’t been met. We are really trying to improve upstream resources,” he said.
“Pakistan still has the appetite to consume more energy. We’re looking now at how Oman can come into serving our LNG needs.”
Al Mazrouei meanwhile said the UAE, existing investors in Pakistan’s refinery industry is looking at expanding. “It has been profitable and stable. If you ask me if we will invest further, I will say yes, and renewable energy has a huge potential in Pakistan. Masdar is looking to explore opportunities and enhance refinery in Pakistan. We are always keen on being an investor there.”
Meanwhile, Egypt’s Minister of Petroleum and Mineral Resources, Tarek El Molla said after economic reforms in the country, such as cutting energy subsidies and floating its currency, the country is attracting more international oil companies and investments. “Lately, we have seen Al Zohr attracted more investors with BP joining Eni. This shows we are on steady growth,” El Molla said.