This represents a 57% increase over the 2006 – 2010 period, in which Apicorp had estimated an investment of $220bn.

Of the total $345bn, oil supply chain accounts for 41%, gas chain 45% and the oil-or-gas fuelled power generation sector 14%.

The capital structure of these investments is likely to be 53% debt and 47% equity for 2007 – 2011. This structure, which is underpinned by a more highly leveraged downstream industry, highlights new challenges for securing the appropriate amount and mix of debt financing.

To successfully attract capital, further improvement of the energy investment climate, particularly in the non-GCC area is required, Apicorp said.

Arab countries most responsible for the current upsurge in projects are Qatar, Kuwait, Egypt and Libya as their combined capital investment requirements have risen by more than 80%.

Qatar, which has shown a stronger momentum, has moved from third to the second place in the country ranking in the region.

With a 56% share of the world’s proven oil reserves and 30% of proven natural gas reserves, the Arab world is well set to bridge the widening gap between rising global energy demand and largely stagnant or even declining supplies from other areas.

The region, which in 2006 contributed 33% of the world’s production of crude oil and condensate and 13% natural gas, has pursued ambitious plans to fully develop its potential on the assumption that the call on the region’s hydrocarbon products will continue to grow.

Apicorp estimates that in 2006 the region invested some $57bn in new energy projects, 82% of which was in the hydrocarbon chain including petrochemicals and fertilisers and 18% in the power and combined power-water sector.

“This level of investment is equivalent to 5% of Arab GDP and 19% of Arab gross accumulation of fixed capital for 2006, “ Apicorp said.

PIN/Gulf-Times.Com