Infield: The Offshore Middle East and Caspian Market

11.01.2011 + + + The new Offshore Middle East & Caspian Sea Oil & Gas Market Report To 2015 report highlights that Persian Gulf oil and gas producers Iran and Saudi Arabia will drive offshore Capex in the Middle East and Caspian region throughout 2011-15. In fact Infield Systems expects a 33% increase in offshore Capex in the Middle East and Caspian over 2011-15 compared to 2006-10, or to approximately $39.9bn from $29.9bn. Much of this growth will be driven by an expected increase in Capex of around $6bn in Iran over the two forecast periods, to around $12bn. Capex in Saudi Arabia is expected to reach $5.8bn over 2011-2015, up from $4.5bn over 2006-2010.

Overall, Infield Systems expects Iran and Saudi Arabia combined to contribute to just over 44% of total offshore Capex in the region between 2011 and 2015. Capex from Qatar is expected to drop markedly in 2011-15 compared to the previous period, perhaps a reflection of the moratorium on further development of the North Field which is expected to last until 2014.

Israel is also expected to become a steady contributor to the regional offshore oil and gas scene during the forecast period, largely through new offshore gas projects in the eastern extremity of the Mediterranean Sea, including some deepwater developments. Just over $2bn is expected to be spent in Israel over the next five years, compared to just $272 million over 2006-10.

Azerbaijan is the largest offshore producer in the Caspian Sea, of both oil and gas, and thus is expected to continue headlining Capex in this sub-region. Kazakhstan, Russia and Turkmenistan are expected to contribute between US$1.6 and US$2bn in expenditure each over the forecast period.

The report also analyses the drivers for the offshore oil and gas sector in the region. A main driver for offshore gas development has been, and will likely continue to be, the strong growth in natural gas demand in the Persian Gulf region and the broader Middle East. The Persian Gulf region has an abundance of reserves of natural gas – much of it offshore such as the South Pars/North Field reservoir which is the largest non-associated gas field in the world – but only Qatar is a significant natural gas exporter.

In addition this new report from Infield Systems assesses the impact of the latest round of sanctions placed against Iran over its nuclear programme, and how sanctions have impacted the development of Iran’s offshore oil and gas sector, especially the South Pars development. China as a major source of investment will likely be increasingly relied upon by Iran, but the number of partners with which Iran can deal with that may have the available technology and expertise to develop its energy sector has been reduced. As a result Iran may also seek to maximise the involvement of domestic companies, but Iran will still face the problem of getting access to the latest technology and equipment to, for example, develop its LNG sector.

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