Market Trends of Middle East and Africa Offshore Energy Industry
This section covers the major market trends shaping the MEA Offshore Energy Market according to our research experts:
Offshore Oil and Gas to Dominate the Market
- The Middle East and Africa are among the most important markets globally for offshore oil and gas market, with primary producers such as Saudi Arabia, United Arab Emirates, South Africa, and Nigeria. The countries in the region are dependent on exports of hydrocarbons to support their economy. Hence, offshore exploration and production are expected to increase as hydrocarbon prices increases.
- For instance, in 2022, Abu Dhabi National Oil Company (ADNOC) announced that it plans to ramp up its oil production capacity from 5 million barrels per day in 2025, ahead of its previous 2030 target. These plans are expected to lead to offshore expansion, and some critical projects are Upper Zakum, Lower Zakum, Umm Shaif, and Belbazem wells.
- Similarly, there are 500 fields in the Niger Delta. Over 55% of these are onshore, while the remaining are in shallow waters (less than 500 meters). Of these fields, 193 are producing, while 23 have either been closed or abandoned, and more than 5284 wells have been drilled as of 2021.
- Due to the increase in the price of natural gas, European countries are looking for an alternative supplier for natural gas, which aids the Middle East and African offshore oil and gas upstream market.
- In 2021, crude oil production in the Middle East and Africa was recorded at 28.16 million barrels per day compared to 2020, which was 27.61 million barrels per day. As crude oil production is increased, the demand for natural also increases.
- Overall, the increasing natural gas demand and price globally are expected to aid the offshore energy market in the Middle East and Africa.
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Saudi Arabia to Dominate the Geographical Segment
- Saudi Arabia is the second largest crude oil producer globally. According to the BP Statistical Review of World Energy 2022, Saudi crude oil production in 2021 was about 10.95 million barrels per day, the highest in the region.
- Saudi Arabia has the world's fifth-largest estimated shale gas reserve. Thus, it has great potential to replicate the development growth in unconventional reserves of North America. In December 2022, Saudi Arabia and Kuwait agreed to develop Durra offshore gas field. It is expected to produce 1 billion cubic feet per day of gas and 84,000 barrels per day of condensate.
- Such developments are expected to serve the country's Vision 2030 program to diversify the economy from crude oil and sharply reduce the carbon footprint in Saudi Arabia. Moreover, the country's development would support the nation in increasing its crude oil export by depending more on domestic natural gas consumption. However, Vision 2030 would also restrain the market from growing during the forecast period, as the program has also prioritized the adoption of renewable energy.
- In March 2022, with soaring crude oil prices and doubling profit in 2021, the country's state oil company, Saudi Aramco, planned to increase its investment by around 50% in 2022. It is estimated that the company invested nearly USD 40-50 billion in 2022, and it is anticipated to continue its growth until mid-2030. With such investment plans, the company is projected to increase its crude oil production capacity to 13 million barrels per day by 2027. It wants to increase natural gas production by more than 50% by 2030.
- Overall, the country's dependence on hydrocarbon production and support of the economy are expected to aid the offshore energy market in the country.
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