GCC planning to award $68bn gas contracts
MANAMA: Despite a growing focus on renewable and alternative forms of energy, oil and gas will meet about 60 per cent of global energy demand in 2040, up from 55pc in 2010.
This and other trends, along with challenges, are explored in the eighth edition white paper just released by Deloitte, titled ‘Middle East Energy and Resources: Managing scarcity for the future’.
Although oil is still projected to remain the primary fuel, significant advancements in technology will cause natural gas to overtake coal as the number two fuel source, according to Deloitte.
In the Middle East, gas is forecasted to overtake oil in demand after 2025, with 50pc of all energy demand coming from gas in 2040.
Most national oil companies in the Middle East already have multi-billion dollar investment plans for gas exploration and production.
GCC states, particularly the UAE, Qatar and Saudi Arabia, plan to award contracts worth more than $68 billion during the next five years to raise gas production.
“Although the share of demand for oil and gas is set to rise, it is important to note that alternative energy sources such as nuclear, wind, solar and biofuel will also take on an increasingly significant role in meeting the world’s energy needs in the future,” said Deloitte in the Middle East energy and resources leader Kenneth McKellar.
With the nature of oil and gas production diversifying, strategies shifting to the unconventional, and an unprecedented rise in energy demand globally, research and development will play a crucial role in the longevity of the industry.
This is especially significant to the Middle East, where capacity building in local knowledge capital is critical to the development of the socio-economic fabric of the region.
The white paper also explores the challenges facing the energy industry, which include the serious issue of skills shortages.
This is a global problem but even more pronounced in the Middle East where students across the region are choosing to pursue business careers outside technology, physical sciences and technical process industries.
These trends are stimulating high demand for a powerful combination of technology and talent in the Middle East.
The restructuring of the existing talent pool, with preference for local hires rather than expensive expatriates, is yet another obstacle to bringing in the required skills in the short-run.
In addition to skills shortages, substantial organisational change across the major players, in the form of human resources transformation, strategic change and workforce planning among other areas, is leading to further delays in the decision-making process and project approvals.
-GDN, May 30, 2013