Middle East to be major oil supplier to China

Oct 10, 2005 02:00 AM

The Middle East will continue to be a major oil industry player and will be the key supplier to the growing Chinese market, according to Hussain Sultan, Group Chief Executive and Board Member of Emirates National Oil Company (ENOC).
Addressing delegates at the Middle East Petroleum and Gas conference taking place in Dubai and which is being hosted by ENOC, Sultan said demand for oil continues unabated despite record crude prices and the falling value of the dollar.

“Oil demand is increasing all the time and the Middle East will continue to be a very important supplier,” he said.
“The Middle East is abundantly endowed with oil and gas reserves. Of the 1,050 bn barrels of proven crude oil reserves at the end of 2001, the Middle East and North Africa accounted for about 69 %. In contrast, the region accounted for just about 31 % of total world production, and about 50 % of exports, which clearly demonstrates the importance of this region to the present and future of the global oil market.”

Sultan said demand “is increasingly being fuelled by industrial development within China.
“The International Energy Agency forecasts the global oil demand to increase to 120 mm bpd in the year 2020 from the current 84 mm bpd,” he said. “By that time, demand in North America is projected to rise by nearly a third, China will double its oil imports and the European Union will import 92 % of its oil.

“The sheer scale of the potential of the People’s Republic -- the fourth largest country in the world with a population exceeding 1.2 bn -- can be viewed in context of the average per capital daily oil consumption in the USA, which is 25 barrels, while in China, it is only 1.3 barrels -- so there is still room for enormous growth.”
But the increasing demand will put investment pressure on producers, warned Sultan.
“Producers will have to accept that they need to dig deep into their pockets to upgrade production facilities if they are going to reap the rewards of this surging demand,” he said.

The Chinese, said the ENOC chief, are also now becoming active within the Middle East’s own oil producing sector.
“From Iran to Sudan, the Chinese are becoming substantial players and they should be allowed into the market, competing for concessions, providing they abide by the regulations and requirements of the host countries.”

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