Arab Spring disrupts energy investment-IEA

Thursday, 20 October 2011 00:04 - - {{hitsCtrl.values.hits}}

PARIS (Reuters): The Arab Spring has disrupted investment plans in oil and gas projects as some governments in the region have shifted their focus to meet increasing demands from their population, the International Energy Agency said on Tuesday.

As a result, this could in the next five years push oil prices higher, the IEA’s chief economist Fatih Birol said at a briefing on the sidelines of the agency’s two-day ministerial meeting.

The IEA estimates the world needs to spend $38 trillion to meet projected energy demand up to 2035, up 15 per cent from their 2010 forecast of $33 trillion.

Birol said there was reluctance from some countries to do so.

“One of the question mark is over the Middle East and Northern Africa region which is crucial to meet demand growth and to meet decline in the existing production,” he said.

“Some countries seem to follow different oil policies not to raise production as much as the market would like to see,” he said. “In other countries they are not able to put money for projects on the table because they have other pressing issues in their countries to meet demands from the population,” he said. “In some countries because of the unrest the projects are not going forward as much as we would like to see,” Birol added.

In an excerpt from the World Energy Outlook to be published on 9 November, the energy body said $10.0 trillion would be needed for oil investments, $16.9 trillion for power, $9.5 trillion for natural gas from 2011 to 2035.