Monday, May 13, 2013

The Middle East Energy Industries Have Enormous Investment Opportunity

The most part of the Arab region has huge storage of natural resources and concerns of oil wealth distribution to that sector are beginning to be raised. The region’s largest opportunities lie with Saudi Arabia Ghawar Oil Field  where the government is focused on a country wide investment in the oil industry that is set to diversify the income streams of the nation. It might bring liberation from the various issues that are responsible for the unstable condition in some parts of the region. Annual investments have been well above $500b although these are strained by rapid economic and population growth in the region.  The fundamentals of the growth of scarcity for energy solutions like oil and welfare are the major drivers behind this boom in the energy industries.

Drawing the focus to Kuwait, a large amount of oil and other energy resources are present there. It helped the economy of Kuwait. Therefore, they are now preparing themselves for the world cup to be hosted in 2020. The supply challenges that are anticipated are evident and in this regard the rest of the region is likely to benefit immensely from this. UAE ‘will see a steady increase in investment in publicly funded energy companies and also to a lesser extent the private funded companies. Take this for instance, though recent investments in the energy industries the occupancy reached 57.8% in 2012 driving further investment in the energy sector.

Beyond the Gulf opportunities exist, but only for those willing to commit and see their investment through their respective cycles. The wider Middle East region has dynamic investment opportunities with Iraq and Libya being some of the two most outstanding examples in that area. Oil industries in Iraq are again on the rise and ministers and other government officials have been invited investor to participate in the process. Competition for the traditional American companies has been very stiff and in this regard, other powers like the European countries have been pushing hard into the market with a competitive edge in their pricing. This therefore implies that the Western Countries have to come to speed with themselves and the kind of quality they are going to offer in order to stay in the loop as top energy providers in this region.

Western economies that are heavily indebted, this can be a way to raise and recover from such a situation considering the Middle East is highly liquid because of its trade in oil. Conclusively there are challenges that are brought about by investment, in spite of the political risks of the Middle East, and it is a matter of cost and benefit analysis of the investment. The most important thing is that the middle east energy industries have got plenty of opportunities.

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