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 from the previous year, according to the latest edition of the MENA Energy Investments Outlook published by the Arab Petroleum Investments Corporation, APICORP.
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 5 years. Plans for power projects are at the top of the 5-year agenda in many countries.
A total of $337 billion had already been committed to projects under execution at the end of 2016. With an additional $622 billion worth of developments in the planning stage, committed and planned investments could add up to $959 billion over a 5-year period, compared to $900 billion in 2015.
Planned investments increased by 2%, whereas committed investments increased by 17%. This represents the transition of some projects and investments from the planned to committed phase.
The total of $337 billion of committed investments for the 5-year period is divided into investments in the oil sector at $121 billion, gas investments at $108 billion, power investments at $91 billion and chemicals at $17 billion. The GCC represents $174 billion in committed investments, more than 50% of the MENA total.
Among the $622 billion worth of planned investments over a 5-year period, the power sector accounts for the largest share at $207 billion. The oil and gas sector will represent $195 billion and $159 billion respectively, with the remaining investments in petrochemicals. At $289 billion, projects under study constitute the largest portion of planned investments.