23 June 2008 07:29 [Source: ICIS news]
SINGAPORE (ICIS news)--The Gulf Cooperation Council (GCC) nations are expected to invest between $160-200bn (€102.4-128bn) in 14 to 20 energy projects to meet their growing energy related needs, said the Emirates Energy Award (EEA).
The rise of energy prices to record highs, coupled with the lack of signs of stability, would increase investment in this sector by approximately 50% within two years, it added in a statement on Sunday.
While there was an increasing momentum across the world to move towards sustainable and renewable energy sources, fears over global economic instability were hampering the progress of these projects, it said, adding that recent events have shown that these fears were unfounded.
"Fears associated with a decline of energy funds and a negative impact on GCC countries following a possible US economic recession or the mortgage market woes have prove to be incorrect, as several current findings seem to indicate the contrary," said Abdullah Al Amiri, chairmain of EEA.
Around $40bn worth of investments would be required in the downstream petrochemical sector by 2010 and GCC countries could safely invest in the energy sector, he added.
The announcement came amidst market consensus that the global energy industry was in a state of "chronic under-investment", which was contributing to surging oil prices.
"With soaring fuel prices in the global markets, liquidity will continue to be injected into the Middle East regions. Foreign reserves available in the market are estimated at $455bn in 2008, up $365bn in 2007. This liquidity will secure the market against any slump and defend against any falls," Amiri added.
Fears of "flooding" from new petrochemical capacities in the Middle East between now and 2012 had been creating jitters in the global market.
EEA said that it expected the growth of GCC nations to remain within world growth rate due to the $132bn current account surplus.
($1 = €0.64)
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