Energy forums 'play crucial growth role'
Manama, March 13, 2013
The role of events like Middle East Oil & Gas Show and Conference (MEOS 2013) in facilitating a fruitful dialogue between the oil industry and finance sector is crucial, according to Finance Minister and Minister in charge of Oil and Gas Affairs Shaikh Ahmed bin Mohammed Al Khalifa.
Shaikh Ahmed was presiding over the first-ever session titled 'Financing the Change - Energy Sector in the GCC - Value Chain Half Empty Half Full', held on the sidelines of the conference.
The minister said events like MEOS help highlight opportunities for economic growth and investment in the oil sector, along with helping potential investors and financiers get a better understanding of the issues relating to the oil and gas industry and study the links between the energy sector and economic growth, reported the Gulf Daily News, our sister publication.
During the session, Saudi Arabian General Investment Authority (Sagia) governor and chairman Abdullatif A Al Othman delivered a presentation on how the oil and gas industry can manage and finance itself in light of forecasts that approximate $15 trillion will be spent in the next 10 years to meet expected future oil and gas demand.
Analysts estimate that oil and gas reserve additions from recovery enhancement will most likely supersede the additions from grassroot exploration.
An abstract of the session on the MEOS website suggests that the industry would need to increase focus on enhancing recovery from oil and gas producing assets as well as focus on hydrocarbon production from tight, deep and unconventional reservoirs.
Dealing with business uncertainties, especially those linked to future oil and gas demand and pricing; increasing environmental awareness and thus environmental control and constraints; managing cost and risk attached to the incremental development barrels, which will be progressively higher than current levels; developing new financing models to encourage the participation of the public and so on are some of the other challenges.
Technological advancement and innovative thinking will be the driving force for achieving all the above.
On how these challenges could be tacked, the abstract adds, host governments would either directly finance or make the necessary changes to enable and encourage investors' participation.
International and independent oil companies will be the main drivers for implementing these inevitable changes.
Service companies will be required to align their research and development functions to the requirements of the end users. They may also find merits in forming alliances with oil companies to shoulder some risk for bigger rewards.
Investment institutions and banks will need to digest and address the future financing requirements of the oil and gas industry. They should develop some innovative financial solutions to meet the enormous funding requirements.
The general public shall be encouraged to participate in financing at least some of the future energy projects.
The relationship between any two or more parties of the above stakeholders will mandate introducing innovative business solutions for managing risks, ensuring growth and sustaining success.-TradeArabia News Service