World energy outlook 2005 : Middle East and North Africa insights

631 Pages·2005·4.028 MB·English

by  OECD

WWOORRLLDD EENNEERRGGYY WWOORRLLDD EENNEERRGGYY OOUUTTLLOOOOKK
OOUUTTLLOOOOKK
Middle East
North Africa
Insights
The world is hungry for energy and getting hungrier.
The countries of the Middle East and North Africa WW
OO
have vast resources of oil and natural gas which
RR
could be developed to meet rising global demand as LL
DD
many supplies elsewhere begin to decline.

EE
But resources alone are not enough. Will investment
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match growth in demand? And will demand continue EE
to surge or will it be curbed by new consumer RR
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country policies? YY

The International Energy Agency’s World Energy OO
UU
Outlook 2005 answers these challenging questions. TT
In addition to providing updated projections of LL
OO
world energy demand and supply to 2030, OO
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it analyses in detail prospects for:
n The Middle East and North Africa’s domestic M
demand for oil, gas and electricity, including for id
d
water desalination; l
e
n The region’s oil and gas resources, plans and E
a
potential for production and how much investment s
t
will be required;

n Energy-sector developments in Algeria, Egypt,

Iran, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, and the N
o
United Arab Emirates; rt Middle East
h
n What will happen if upstream oil investment is delayed;
A
n What will happen if consuming countries, driven by f
r
i
security concerns, persistent high prices or environmental c North Africa
a
policies, act to curb demand and develop alternatives.
I
n
The producing countries in the Middle East and North Africa s
i
g
can count on growing demand for their oil and gas. h Insights
t
Are energy importing countries’ expectations of them realistic? s
€150
(61 2005 26 1 P1) ISBN 92-64-10949-8 INTERNATIONAL ENERGY AGENCY
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WWOORRLLDD EENNEERRGGYY OOUUTTLLOOOOKK
2
200
Middle East
and
North Africa
Insights
INTERNATIONAL ENERGY AGENCY
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INTERNATIONAL ENERGY AGENCY
The International Energy Agency (IEA) is an autonomous body which was established in
November 1974 within the framework of the Organisation for Economic Co-operation
and Development (OECD) to implement an international energy programme.
It carries out a comprehensive programme of energy co-operation among twenty-six of the
OECD’s thirty member countries. The basic aims ofthe IEA are:
• to maintain and improve systems for coping with oil supply disruptions;
• to promote rational energy policies in a global context through co-operative relations
with non-member countries, industry and international organisations;
• to operate a permanent information system on the international oil market;
• to improve the world’s energy supply and demand structure by developing alternative
energy sources and increasing the efficiency of energy use;
• to assist in the integration of environmental and energy policies.
The IEA member countries are: Australia, Austria, Belgium, Canada, the Czech Republic,
Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, the Republic
of Korea, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, the United Kingdom, the United States. The European
Commission takes part in the work of the IEA.
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
The OECD is a unique forum where the governments of thirty democracies work together
to address the economic, social and environmental challenges of globalisation. The OECD
is also at the forefront of efforts to understand and to help governments respond to new
developments and concerns, such as corporate governance, the information economy
and the challenges of an ageing population. The Organisation provides a setting where
governments can compare policy experiences, seek answers to common problems,
identify good practice and work to co-ordinate domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech
Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy,
Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland,
Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom
and the United States. The European Commission takes part in the work of the OECD.
© OECD/IEA, 2005
No reproduction, copy, transmission or translation of this publication may be made
without written permission. Applications should be sent to:
International Energy Agency (IEA), Head of Publications Service,
9 rue de la Fédération, 75739 Paris Cedex 15, France.
001-Intro 21/10/05 12:03 Page 3
This book is dedicated to Pierre Lefèvre, who died on 28 August 2005.
His outstanding commitment, wisdom and humanity shaped the
IEA Public Information Office from 2002 to 2005.
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FOREWORD
The World Energy Outlook (WEO) series is designed to give a framework of
coherent future visions to assist government and industry in their decision
making.
This year’s WEO, while maintaining the global coverage, examines in detail the
prospects and issues in the major oil- and gas-producing countries of the
Middle East and North Africa (MENA). This publication has involved a huge
data gathering exercise and in depth analysis. We have been aided by experts
throughout the MENA region and from elsewhere in the world. I am indebted
to them. I also wish to pay tribute to the IEA team, led by Dr. Fatih Birol, for
its remarkable endeavor and results.
The picture which emerges is one of sustained growth in demand for the
region’s oil and gas, coupled with sustained economic and energy-demand
growth in the region. The conclusion appears straightforward. In a well-
functioning global economy, a suitably responsive investment in oil and gas,
resulting in supply growth from the MENA region will benefit both MENA’s
and the global economy.
But the global economy does not function perfectly – mistaken perceptions of
risk and opportunity may erroneously impact or delay decisions, and these
effects can also be long lasting. Moreover, rational commercial decisions in a
particular market may cause profound global damage if insufficient weight is
given to environmental values.
Deferred investment in oil and gas supply is one risk. Our analysis shows that
a failure by MENA governments to commit or facilitate the necessary timely
investment would diminish economic welfare not only among oil-consuming
countries but also in the region. Oil and gas prices would rise, but demand
would fall, resulting in a net loss to producers and consumers alike.
As we go to press, unduly high oil prices, sustained in part by inadequate
upstream and downstream oil-supply infrastructure, are giving rise to new cries
of alarm in consuming countries. Energy-intensive developing countries are
harder hit than the diverse economies of the OECD.
Governments have other reasons to act in the energy sector. They are
increasingly aware of the need to take new measures to increase efficiency and
to cut the growth in demand from those forms of energy which contribute
disproportionately to the burden of greenhouse-gas emissions.
These considerations led us to develop the World Alternative Policy Scenario.
The policy and market responses to the oil shocks of the 1970s show that
radical changes to the energy economy can be made. We have not assumed
Foreword 5
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drastic measures, merely that governments in consuming countries put into
effect those measures which they are already contemplating. How far might the
energy future be altered by such policies? The answer is that demand still grows
– albeit more slowly, but still very substantially. Whichever scenario, the central
message of our analysis is unchanged: the world needs sustained investment in
oil and gas in any plausible future, a major part of it in the countries of the
Middle East and North Africa.
We have set out the policy issues faced by both consumer countries and
producers. It is certain that both will make better decisions if they freely
exchange their information, intentions and anxieties.
Claude Mandil
Executive Director
6 World Energy Outlook 2005
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ACKNOWLEDGEMENTS
This study was prepared by the Economic Analysis Division of the
International Energy Agency in co-operation with other divisions of the
IEA. The Deputy Executive Director and Director of the Non-Member
Countries Office, William C. Ramsay, and the Director of the Long-Term
Office, Noé van Hulst, provided guidance and encouragement during the
project. The study was designed and managed by Fatih Birol, Head of the
Economic Analysis Division.
Other members of EAD who were responsible for bringing the study to
completion include: Maria Argiri, Marco Baroni, Amos Bromhead, François
Cattier, Laura Cozzi, Hideshi Emoto, Lisa Guarrera, Teresa Malyshev, Trevor
Morgan, Nicola Pochettino and Maria T. Storeng. Claudia Jones provided
essential support. Robert Priddle carried editorial responsibility.
The study also benefited from input provided by other IEA colleagues,
particularly: Chris Besson, Jeff Brown, Dunia Chalabi, Viviane Consoli, Sylvie
Cornot-Gandolphe, Gordon Duffus, Lawrence Eagles, Jason Elliott, David
Fyfe, Rebecca Gaghen, Dagmar Graczyk, Klaus Jacoby, Tom O’Gallagher,
Pawel Olejarnik, Riccardo Quercioli, James Ryder, Atsushi Suda, Harry
Tchilinguirian, Nancy Turck, and Fritdjof Unander. Pierre Lefèvre, Angela
Costrini, Muriel Custodio, Loretta Ravera, Bertrand Sadin and Tyna
Wynaendts of the Public Information Office provided substantial help in
producing this book.
The work could not have been achieved without the substantial support
provided by many government bodies, international organisations and energy
companies worldwide, notably the US Department of Energy, the UK Foreign
& Commonwealth Office, the Japanese Ministry of Economy, Trade and
Industry, the Organization of the Petroleum Exporting Countries (OPEC),
Statoil ASA, Schlumberger Ltd, IHS Energy and the International Monetary
Fund (IMF). Special thanks go to the Kuwaiti Ministry of Energy for hosting
the 3rd Joint IEA-OPEC Workshop in Kuwait City in May 2005, which
provided key input to this study.
Acknowledgements 7
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An Advisory Panel provided overall guidance for the work, shaped the analysis
and drew out key messages.Its members are:
Mr. Mohamed A. Awad. . . . . . . . . . . Chairman, Middle East and Asia,
Schlumberger, UAE
Prof. Sadek Boussena. . . . . . . . . . . . . Université Pierre Mendès France de
Grenoble, France, and former Minister of
Energy, Algeria
Mr. Guy Caruso. . . . . . . . . . . . . . . . . . . Administrator, Energy Information
Administration, US
Prof. Musa Essayyad . . . . . . . . . . . . . King Fahd University of Petroleum &
Minerals, Saudi Arabia
Dr. Fereidun Fesharaki. . . . . . . . . . . President, FACTS, Inc., Hawaii, US
Mr. Walid Khadduri. . . . . . . . . . . . . . Chief Economics Editor, Dar Al Hayat,
Lebanon
Mr. Mohsin Khan. . . . . . . . . . . . . . . . . Director, Middle East and Central Asia,
International Monetary Fund, US
Dr. Hisham Khatib. . . . . . . . . . . . . . . WEC Honorary Vice Chairman, and
former Minister of Energy, Jordan
Dr. Edward L. Morse. . . . . . . . . . . . . Executive Adviser, Hess Energy Trading
Company LLC, and former Deputy
Assistant Secretary of State, US
Dr. Masahisa Naitoh. . . . . . . . . . . . . . President, The Institute of Energy
Economics, Japan
Dr. Ramzi Salman . . . . . . . . . . . . . . . . Advisor to the Minister of Energy and
Industry, Qatar and Chairman of the
Executive Board of the International
Energy Forum Secretariat, Saudi Arabia
Ms. Nemat Shafik. . . . . . . . . . . . . . . . . Director General, Department for
International Development, UK and
former Vice-President, Infrastructure,
World Bank, US
Dr. Adnan Shihab-Eldin. . . . . . . . . Acting Secretary General, OPEC, Austria
8 World Energy Outlook 2005
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Many international experts commented on the underlying analytical work and
reviewed early drafts of each chapter. Their comments and suggestions were of
great value. Prominent contributors by chapter include:
Oil Outlook in the Middle East and North Africa
Thomas Ahlbrandt United States Geological Survey, US
Ken Chew IHS Energy, Switzerland
Will Davie Simmons & Company International Ltd., UK
Mark J. Finley BP Plc., UK
Guy Gantley Foreign & Commonwealth Office, UK
Dermot Gately New York University, US
Nadir Gürer OPEC, Austria
Troy Hansen Halliburton, Norway
Sigurd Heiberg Statoil ASA, Norway
Jostein Dahl Karlsen Ministry of Petroleum and Energy, Norway
David Knapp Energy Intelligence Group, US
Fikri Kuchuk Schlumberger, UAE
Valerie Marcel Royal Institute of International Affairs, UK
Yves Mathieu Institut Français du Pétrole, France
Peter Nicol Tristone Capital, UK
S. Hossein Samiei International Monetary Fund, US
Robert G. Skinner Oxford Institute for Energy Studies, UK
Mahendra K. Verma United States Geological Survey, US
Natural Gas Outlook in the Middle East and North Africa
Thomas Ahlbrandt United States Geological Survey, US
Albert Bressand Shell, UK
Ken Chew IHS Energy, Switzerland
Jostein Dahl Karlsen Ministry of Petroleum and Energy, Norway
Robert G. Skinner Oxford Institute for Energy Studies, UK
Jonathan Stern Oxford Institute for Energy Studies, UK
Wim Thomas Shell, UK
Mahendra K. Verma United States Geological Survey, US
Acknowledgements 9