Industry leaders have called for an increase in Middle East oil investments to support the volatile market. Lower oil prices have had a negative impact on investments in the region.
Paal Kibsgaard, CEO of world’s largest oilfield services company Schlumberger, said on Monday that investment in exploration and production will have to start increasing soon to help balance the global oil market.
“The medium- to long-term oil environment will remain subject to periods of volatility and the industry may see fewer and larger service operators in the future,” he told a conference in Dubai.
World energy watchdog International Energy Agency said in July that the industry cut more than $300 billion in spending in two years, or 42 per cent of the total.
Nonetheless, recent developments signal that investment is slowly returning to the region’s oil industry.
GE Oil & Gas said earlier on Monday that it has signed a long-term, multi-million-dollar contract with Petroleum Development Oman for the provide progressing cavity pump equipment and services.
Last week, Dubai’s Emirates National Oil Company (Enoc) announced the expansion of its refinery in Jebel Ali by 50 per cent to increase its daily capacity to 210,000 barrels per day (bpd).
Enoc awarded the contract engineering procurement and construction contract for the design and construction of a new processing unit to Rome-based oil services company Technip Italy.
With the expansion worth more than $1 billion, the oil firm will have an additional capacity of 70,000 bpd.
On September 22, the UAE emirate of Fujairah launched the country’s first very large crude carrier (VLCC) jetty on the Indian Ocean.
The AED650 million berth will enable Fujairah Port’s port customers to load or discharge up to 2,000,000 barrels of crude oil within 24 hours and can facilitate tankers up to 344 meters long and up to a dead weight tonnage of 363,000 tonnes.
There were also reports of region’s government and private companies taking several cost-cutting measures including massive layoff.
Meanwhile, Saudi Aramco said it hadn’t laid of staff but was “recruiting steadily.”
“We are steady in our plans, we are the only company that weathered through this environment unchanged,” said Mohammed Al Qahtani, the oil giant’s senior vice president of upstream, on Monday.