Oil Companies Turning Away From The Middle East
The violence and cutthroat politics of the Middle East, combined with declining oil and gas production levels, has triggered a subtle but significant shift away from what has long been the center of the energy industry to other regions around the world.
The overall geopolitical situation in the Middle East has been deteriorating since the first major war between Arabs and Israelis in 1948. Conflicts are becoming more violent, weapons used are deadlier, and the number of casualties keeps rising.
Despite the fact that the Arabian Gulf region still has the greatest concentration of oil and gas fields anywhere in the world — oil and gas that is easy to harvest and therefore inexpensive to extract and bring to market, giving oil companies a wider profit — the price of war and never-ending conflict has begun giving oil majors serious pause.
In 2013, according to the BP Statistical Review of World Energy, countries in the Gulf and Arab Peninsula East “accounted for almost 33% of global oil production and 17% of gas output.” But those numbers represent a three-year flat line after years of increases.
Overall production by the Arab oil powerhouses has been slowing in recent years, including in Saudi Arabia and the UAE, considered to be the cornerstones of the Arabian Gulf.
It all adds up to a subtle but significant shifting of the center of the oil and gas universe toward Africa, Asia, and North and South America.
As the Reuters report says, “Advances in horizontal drilling, hydraulic fracturing, seismic surveying and deepwater drilling have opened a much broader global oil and gas resource base, giving exploration and production companies many more options.”
Oil and gas companies are increasingly taking those options.
Source: oilpricecom
