Thursday, July 31, 2008
Petrodollar spending spree in Middle East
OPEC revenue from oil sales reached USD650B in 2006, an increase of 600% compared to its revenue in 1998, although being offset by a nudge with the weakening of the US dollar. If the weakening continues, OPEC may consider switching to Euro. Iran and Qatar is expected to represent almost 50% of total capital expenditure for oil field facilities and structures in the region. Qatar's North field expansion, which was discovered in 1971, has a total of 30 development phases and is estimated to be the size of the whole Qatari peninsula.
Difficulties emerged when the French government had instructed Total to reduce its spending in Iran after the US sanction was in place in Nov 1979.
Kazahkstan is expected to be the second highest spender next to Iran with 20% of regional spending and estimated reserve of 14 Billion barrels of recoverable oil.
Saudi is expected to spend a cool USD 10B for Manila field with a projected 900,000 barrel-per-day production by 2011. The Gulf Karan is expected to produce 1 bcf/d (billion cubic feet per day) by 2011 also.
Exciting times ahead......but will this keep up with increasing demand?