Bigger oil industry role for Arabian Gulf
Manama, July 5, 2010
With the fallout from the oil spill in the Gulf of Mexico in US, the Arabian Gulf region's central role is set to grow, said an industry expert.
'The recent events in the Gulf of Mexico have given all participants in the energy industry, producers and consumers alike, cause for thought,' said UAE-based Crescent Petroleum executive director Badr Jafar.
'We, at Crescent, have no doubt that the repercussions of the spill for the industry are going to be felt for many years to come.
'One unquestionable outcome is that the whole oil and gas industry will now be under greater scrutiny and will be held, justifiably, to the highest possible safety and environmental standards.
'Another is that the Arabian Gulf will play a critical role in ensuring that global oil markets remain well supplied through this challenging period.'
Last year the region produced on average 23.6 million barrels of oil per day, equivalent to 30 per cent of world production.
Deepwater drilling for oil and gas is now understood to be even more difficult and high-risk than previously thought.
Consequently, it seems likely the sector will face not only more regulation but also the threat of reduced or delayed investment.
'The International Energy Agency (IEA) estimates that the six-month moratorium on drilling in the Gulf of Mexico, which may yet be extended, combined with the time required for new deepwater regulations to be drawn up and adopted, means that the US Gulf of Mexico region could lose one to two years of progress relative to where it would have been had the spill not happened,' said Jafar.
The IEA estimates that as a result, by 2015, the Gulf of Mexico oil production could be 100,000 to 300,000 barrels of oil per day lower than previous forecasts.
'More significantly, it is likely that the US oil spill will slow deepwater drilling exploration and development around the world, as regulators and operators take time to assess what measures need to be taken to prevent such spills happening again, and many players may in turn reduce investment in the sector in the face of greater perceived risks.'
'We believe the Arabian Gulf's private sector will play a key role in contributing to the continued security of the global oil system,' he said.
'That is why we are actively investing in the oil and gas sector within and outside the region. The Gulf of Mexico incident has shocked the industry and the world. We will do our part in ensuring it does not lead to an economic shock as well.'-TradeArabia News Service