“Dhaman”: $406-billion foreign investments in Arab oil and gas sector over 22 years

Low risks and high incentives for exploration and refining projects in UAE, Saudi Arabia, Qatar, Iraq, Egypt, Kuwait and Oman

In its sectoral report, Dhaman reveals that the US and Russia top the list of key investors

The Arab Investment & Export Credit Guarantee Corporation (Dhaman) revealed that the oil and gas sector in Arab countries attracted 610 projects implemented by 356 foreign and Arab companies in the region with capex of around $406 billion between January 2003 and May 2024, i.e. about 22 years.

In its first sectoral report on the oil and gas sector in Arab countries for 2024, it said that the US came first as the most important investor in the Arab region in the oil and gas sector in terms of number of projects, with 85 projects representing 14% of the total. Russia topped the list in capex with $61.5 billion accounting for 15.2% of the total, according to the database of world FDI projects.

Based on four core pillars in the sector: outlook for production and foreign trade till 2030, foreign projects, the sector’s investment and business risk assessment, the report added that FDI projects in the oil and gas sector in the period (2003-2024) were geographically concentrated in UAE, Egypt, Iraq, Saudi Arabia and Qatar, representing 63.8% of the total (389 projects), 71% of the capex ($288 billion) and 68.2% of the new jobs (79.2 thousand jobs).

The report noted that the top 10 companies accounted for roughly 18% of the newly implemented projects, 43.5% of the capex and 34.8% of the total new jobs. Russia's Rosatom Group came first in terms of capex with over $30 billion, while Royal Dutch Shell and UAE’s Dana Gas groups topped the list of key founders with 14 projects, accounting for 2.3% each.

In terms of the Arab oil and gas sector’s investment and business risks and incentives according to Fitch Ratings Agency in 2024, they are measured by four main indicators: risk and incentive indicators (country) and (industry) in the exploration phase, and risk and incentive indicators (country) and (industry) in the refining phase. According to the average results of the four indicators, UAE, Saudi Arabia, Qatar, Iraq, Egypt, Kuwait and Oman came respectively as the best Arab countries in view of lower risks and higher incentives, followed by Algeria, Bahrain, Mauritania, Libya, Tunisia, Sudan and Yemen.

Regarding the outlook for reserves, production and export of oil, gas and petroleum products, proven oil reserves in the Arab region, according to Fitch, are expected to decrease to 704 billion barrels in 2024 representing 41.3% of the global total amid forecasts of their continuous decline by 7% to 654.5 billion barrels in 2030.

Fitch also forecasted that proven natural gas reserves in the Arab region would reach around 58 trillion cubic meters, accounting for 26.8% of the global total, but expected to fall by 7.5% to 53.53 trillion cubic meters in 2030.

The report projected the Arab countries’ production of crude oil, compressed gas and other liquids to rise by 6.4% to 28.7 million bpd in 2024, then up to 33 million bpd in 2030. The crude oil refining capacity is also expected to increase to 11.3 million bpd in 2024, making up 10.7% of the global total, then up to 11.4 million bpd in 2030. The report also anticipated that Arab hydrocarbon exports will hit 23.5 million oil equivalent barrel (OEB) per day in 2024, then up to 27 million OEB per day in 2030.