Approximately $140 billion worth of engineering and construction contracts have been either awarded by national oil companies (NOCs) or are planned throughout the Middle East in 2011, said a Deloitte white paper on energy & resources in the Middle East entitled "Show me the money: Opportunities for private sector investment in the oil and gas sector". According to the Deloitte white paper, upstream oil and gas development and pipelines have not been widely accessible to the private sector. However, exceptions have been made in the interest of pressing market need, or to gain access to specialist technologies and practices. As an example, the Deloitte white paper said, Saudi Arabia developed its own gas initiative some time ago to lessen dependence on imported gas for domestic consumption and exploit natural gas reserves for the same purpose. "In common with other GCC NOC's, the Kingdom entered into joint ventures and contracts with international oil companies (IOCs) to access the technology and transferable skills necessary to enable optimal use of their natural resources," said Kenneth McKellar, partner and Energy and Resources leader at Deloitte in the Middle East. The white paper reiterates that offshore exploration also presents an opportunity for IOCs to lend much needed technical expertise. It reveals that regional NOCs originally focused on more accessible and cheaper, onshore exploration but are now under pressure to maximize and replace output from onshore and offshore fields that are maturing. "The region's offshore technological requirements have to cover a range of geologies, from the large shallow-water Gulf acreage, to the deep-water acreage in Egypt with depths of over 600 meters," McKellar said. The Deloitte white paper further said an area where the private sector has the potential to play a particularly important role is the construction and upgrading of regional petrochemical refineries and petrochemical plants. "Over the course of the coming decade, governments of the Middle East will deploy significant resources to ensure that petrochemicals manufacturing plays a key role in their domestic industrial base," McKellar said. The paper further said that private sector involvement throughout the Middle East enabled petrochemical capacity in the region to grow by 3.7 percent during the past decade, despite the global financial crisis, and at a time when manufacturers in the US and Europe were forced to either cut production or close their facilities. Moreover, it said over the next five years, the region will witness strong growth in hydrocarbon production as the world's dependence on fossil fuels continues. "To attain forecast production levels, drilling activity, both onshore and offshore, must grow at a considerable rate due to the increasing demand for rigs and associated drilling services. As an example, if Iraq is to achieve its forecast medium term outputs, not hundreds but thousands of wells will have to be drilled, " McKellar said. It report stressed that oil field services (OFS) in the region are provided not only by the in- house resources of the NOC's, but by a host of private players, both international and domestic, that will conduct drilling work and require expenditure in the MENA region that is forecasted to surge by over $10 billion to reach $28 billion by 2014.
