chapter two - OAPEC

______________________________________________________________________________ 

THE MINISTERIAL COUNCIL 

H.E. Dr. Chakib Khelil 

H.E. Abdul Hussein bin Ali Mirza 

People’s Democratic 

Republic of Algeria 

Kingdom of Bahrain 

H.E. Eng. Samih Samir Fahmy 

Arab Republic of Egypt 

H.E. Dr.Hussein Al-Shahrastani 

Republic of Iraq 

H.E. Shaikh Ahmad Al Abdullah Al-Ahmad Al-Sabah 

State of Kuwait 

H.E. Dr. Shokri Mohammad Ghanim 

H.E. Abdullah bin Hamad Al-Attiyah 

Great Socialist People’s 

Libyan Arab Jamahiriyah 

State of Qatar 

H.E. Eng. Ali bin Ibrahim Al-Naimi 

Kingdom of Saudi Arabia 

H.E. Eng. Sufian Al-Alaw 

Syrian Arab Republic 

H.E. Mohammad Bin Zaen Al-Hamly 

United Arab Emirates

______________________________________________________________________________ 

THE EXECUTIVE BUREAU 

Mr. Mohamed Ras Al Kaf 

Mr. Ali Abdul Jabar Al-Sawad 

People’s Democratic 

Republic of Algeria 

Kingdom of Bahrain 

Mr. Eng. Ahmad Saeed Al Ashmawi 

Arab Republic of Egypt 

Mr. Abdul Karim Luaibi Bahed (1) 

Republic of Iraq 

Mr.Eng. Adel Abdul Aziz Al-Jasim 

State of Kuwait 

Mr. Eng. Mohammad Kamil Al-Zindah 

Mr. Salem Buti Al-Naimi 

Great Socialist People’s 

Libyan Arab Jamahiriyah 

State of Qatar 

Mr. Eng. Nasser Bin Ibrahim Al-Fuzan 

Kingdom of Saudi Arabia 

Dr. Eng. Hassan Zainub 

Syrian Arab Republic 

Mr. Eng. Nasser Mohammed Al-Sharhan 

United Arab Emirates 

___________________________________________________________ 

(1) Succeed Mr. Abdul Sahib Salman Qutob in October 2009 

(2) Succeed Mr. Eng. Fathi Mohammed Al-Abbar in June 2009

______________________________________________________________________________ 

THE JUDICIAL TRIBUNAL 

Dr. Moustafa Abdul Hayy Al-Sayed 

President 

Shaikh Abdul Rahman bin Jaber Al 

Khalifa 

Vice-President 

Mr. Jawad Omar Al-Sakka 

Member 

Dr. Nabil Abdullah El-Araby 

Member 

Mr. Khalifa Daalouj Al-Kobaissi 

Member

______________________________________________________________________________ 

THE GENERAL SECRETARIAT 

H.E. Abbas Ali Naqi 

Secretary General 

The Arab Center for Energy Studies 

Dr. Mohammed Mukhtar Al-Lababidi 

Dr. Jamil Mohammed Tahir 

Director of the Technical Affairs 

Department 

Director of the Economics Department 

******* 

Mr. Aissa Siouda 

_____________________________ 

Acting Director of the Information and 

Library Department 

Director of the Finance and 

Administrative Affairs Department* 

* The Finance and Administrative Affairs 

Department is currently under the supervision 

of the Secretary General

Contents 

CONTENTS 

PREFACE ................................................................................................................ 

PART ONE 

INTERNATIONAL DEVELOPMENTS 

IN OIL AND ENERGY 

CHAPTER ONE: DEVELOPMENTS IN GLOBAL MARKETS AND THEIR 

IMPACT ON OAPEC MEMBER COUNTRIES 

Foreword…… ….…..………………………………………...….…………………… 

3 

I. Major Developments in the World Oil Market in 2009And Related 

Factors …………………………………………………………………….…… 4 

1. Supplies………………..…………………….……………..……………….. 4 

1-1 OPEC Supplies………….…………………………………………. 5 

1-2 Non-OPEC Supplies……………..………………………………….. 7 

2. World Oil Demand…………………..………………………...………….. 7 

2-1 OECD Countries…………………….…………………………..…… .…. 

11 

2-2 Developing Countries…………………..…..…..………………….….... 12 

2-3 Countries in Transition……………………...……………………… 13 

3. Price Trends …...….……..……...…..…..………….…..….……………. 

13 

3-1 Crude Oil Prices…………………………………………………… 13 

3-2 Spot Prices for Oil Products………………………………...……… 17 

3-3 Oil Freight Prices………………………..…………………...……… 19 

4. World Oil Inventories………………………………………………… 20 

4.1 World Commercial Stocks……………………………………...…… 20 

4.2 US Strategic Petroleum Reserve………………...………………...… 20 

II. Value of OAPEC Member Countries Petroleum 

Exports……………………………………………………………...……. 21 

III. Developments in Oil and Energy Consumption in the Arab 

Countries .……..….….……………………………………………………....… 

22 

1. Arab Countries……..………………….. ………………….….…..……… 

22 

1-1 Total and Per Capita Energy Consumption…….. …….…...............… 23 

1-2 Energy Consumption by Source…….……............…. .…….…….…… 

25 

2. Total Energy Consumption in OAPEC Member Countries.. .……… 

31 

2-1 Total and Per Capita Energy Consumption……………………….. 31 

2-2 Energy Consumption by Source…………………….……………… 32 

3. Local Prices………………………………………………….……………... 36

Contents 

CHAPTER TWO: ARAB AND WORLD DEVELOPMENTS IN 

THE EXPLORATION, RESERVES AND PRODUCTION OF 

ENERGY RESOURCES 

I. Oil and Gas……. ………..………………….…………….…………………… 

69 

1. Exploration and Production: An Overview…….. ……….………….… 

69 

1-1 Seismic Surveys……..... ……………………….………….…………….... 85 

1-2 Exploratory and Developmental Drilling………….............................. 85 

2. Oil and Natural Gas Reserves………..... .……….……………….……… 88 

2-1 Oil Reserves………..…………….. ……………….………………………. 88 

2-2 Natural Gas Reserves……………………………..………………...…. 90 

3. Hydrocarbon Liquids and Natural Gas Production…...……. ……….. 92 

3-1 Hydrocarbon Liquids Production…… …….…...…………...……….…… 

92 

3-1-1 Oil Production…………..……………………………..……………….. 92 

3-1-2 NGL Production in OAPEC Members and the World……………..… 95 

3-2 Marketed Natural Gas ………………………………………….…………. 95 

II. Coal ………..……………..………………….……….…………….…………… 

98 

III. Nuclear Energy………………………..…….. ……….………….….………… 

100 

IV. Renewable Energy Sources …..........…..…………..….………..……….…… 

102 

1. Hydropower... …..….………...…….……………….…………...………… 

102 

1-1 Hydropower in the World……………….………………………………… 102 

1-2 Hydropower in the Arab Countries……...…………………………..…… 103 

2. Wind Energy ...……...…………………….....…..................….…………… 103 

2-1 Wind Energy in the World……………..………………………………… 103 

2-2 Wind Energy in the Arab Countries……...…………...…………………. 104 

3. Solar Energy ......................................................…….…………………..…. 105 

3-1 Solar Energy in the World………………………..……….……………... 105 

3-2 Solar Energy in the Arab Countries……………………..……………… 106 

4. Geothermal Energy.…………. ….……………..………….……………..… 106 

4-1 Geothermal Energy in the World……………..…………………...…….. 106 

4-2 Geothermal Energy in the Arab Countries ……………………..……..… 107 

5. Solid Biomass Energy………………………………………………… 107 

5.1 Solid Biomass Energy in the World …………………...…………… 107 

5.2 Solid Biomass Energy in the Arab Countries …………………….. 108 

6. Ocean and Tidal Power………………………………………………. 

108 

CHAPTER THREE: ARAB AND WORLD DEVELOPMENTS IN 

PETROLEUM DOWNSTREAM INDUSTRIES 

I. 

Refining Industry………………………………….. ……….…………….…... 

133 

1. World Developments ………………….……..…………..……….……….. 133 

2. Developments in Arab Countries………… ……..……..………….……. 

140 

II. Petrochemical Industries …………..…………...….….……….…………….. 144

Contents 

1. World Developments ………....…………..…….………………………..… 144 

2. Arab Developments………….….……………………………….. ……….. 149 

2-1 Algeria………………….………………..……………………………… 149 

2-2 Egypt……………………………………………………………….. 149 

2-3 Kuwait ………...……………………………………………………… 150 

2-4 Qatar…………………………………………………………... 150 

2-5 Saudi Arabia…………………………………………………………... 150 

2-6 UAE…………………………………………………………................ 152 

III. Natural Gas Consumption, Trade and Processing………….. .….………. 153 

1. World Developments ….……..……..……….…………………………….. 153 

1-1 Natural Gas Consumption……………..………….. ……...……….……. 153 

1-2 Natural Gas Trade………….……………………………….……..……. 155 

1-3 World Natural Gas Prices………..…………………………………….. 157 

2. Arab Developments…………………..…………... ……….………………. 

158 

2-1 Algeria………………………………………………………………… 158 

2-2 Bahrain………………………………………………………………… 158 

2-3 Egypt………………………….……………………………………….. 159 

2-4 Iraq…………………………………………………………………….. 160 

2-5 Kuwait……………………………………………...………………… 160 

2-6 Libya………………………...……..………………………………….. 160 

2-7 Qatar………………..………………………………………………... 161 

2-8 Saudi Arabia………………………………………...………………… 161 

2-9 Syria………………………………………………………….………... 162 

2-10 UAE…………………………………………..…………………………… 162 

2-11 Jordan……………….…….………………..……………………………… 162 

2-12 Yemen………………...….………………..……………………………… 163 

3. World’s Most Important Gas Activities………….………….………… 163 

4. World’s Unconventional Natural Gas Resources.………….………… 164 

PART TWO 

OAPEC ACTIVITIES IN 2009 

CHAPTER ONE: THE MINISTERIAL COUNCIL AND THE EXECUTIVE 

BUREAU 

I. The Ministerial Council….. ………….……………….………...……….…… 

187 

II. The Executive Bureau …….……….………………...………….....……….… 

187

Contents 

CHAPTER TWO: THE GENERAL SECRETARIAT 

I. The Data Bank and Related Activities .…….……...………………….…… 

188 

1. Data Bank …….…………………………………..…..…….…………...… 188 

1-1 Following-up Development of the Data Bank……………………… 188 

1-2 Reports and Papers……………………………...………………….. 188 

1-3 Workshop on Data Bank…………………………………………… 189 

1-4 Paper Entitled “General Secretariat’s Data Bank”…………………. 189 

1-5 Other Activities…………………………………………………… 189 

2. Information and Library Services ………….…………...…………….. 190 

2-1 Bibliographical Services……………………………………………. 190 

2-2 Indexing and Classification………………………………………… 190 

2-3Acquisition………………………………...…………………………. 190 

2-4 Current Awareness and Lending……………………………………….. 191 

3. Studies, Papers, and Reports …………….…………....……….……..… 

3-1 A Study on “Energy Balance in South America and the Potential 

Market for Oil and Natural Gas from the Member Countries”………. 191 

3-2 A Study on “The Global Financial Crisis and its Impact on The Initial 

Potential of the Oil Industry in the Arab Countries”…………………. 192 

3-3 A Study on “The Role of Member Countries in Achieving Stability in 

World Oil Market: Past, Present and Future” 192 

3-4 A Study Entitled “The Distribution of Total Revenues of Oil Barrel 

and the Share of OAPEC’s Member Countries”…………………… 192 

3-5 A Study on “Developments in World Oil Prices and Their Impact on 

The Global Economy”……………………………………………….. 193 

3-6 A Study Entitled: “ The Development of Natural Gas Market in the 

European Union and its Implications for the Gas Demand from 

OAPEC Member Countries”…………………………………………. 194 

3-7 A Study on “Fertilizers and Petrochemical Industry in the Arab 

Countries: Current Status and Future Projects”…………………….. 194 

3-8 A Study on “Development of Natural Gas Resources in Arab 

Countries”…………………………………………………………… 195 

3-9 A Study on “Arab and Global Oil Refining Industry”………………. 195 

3-10 A Study on “Improved Oil Recovery”……………………………….. 196 

3-11 A Paper Entitled “Principles of Oil Exploration”……………………. 197 

3-12 A Paper Entitled “Production of Oil and Gas” 198 

3-13 Paper Entitled “The Fundamentals of Refining Industry and 

Production of Clean Fuel”……………………………………………. 198

Contents 

3-14 Paper Entitled “Petrochemicals Industry”………………………… 199 

3-15 The Paper Entitled “Natural Gas Industry in OAPEC Member 

Countries”…………………………………………………………… 200 

3-16 A Paper Entitled “Oil Refining Industry in the Arab World: 

Challenges and Opportunities……………………………………… 200 

3-17 A Paper Entitled “Oil and Gas Industry in GCC States”…………….. 201 

II. Arab and International Cooperation………………………………………. 202 

1. Seminars and Meetings Organized by General Secretariat……….…. 

1-1 The 20 th Forum on the Fundamentals of Oil and Gas Industry……….. 202 

1-2 5 th Coordination Meeting for Managers of Arab Petroleum Training 

Institutes in OAPEC Member Countries 203 

1-3 16 th Coordination Meeting of Environment and Climate Change 

Experts in Member Countries………………………………………….. 204 

1-4 9 th Meeting of Working Group on Potential Cooperation in Natural 

Gas Investment………………………………………………………… 204 

2. Conferences, Seminars and Meetings Attended by the General 

Secretariat ….………………………………..………….….…….…………. 

2-1 Meeting of WEC Cleaner Fossil Fuels Systems Committee…………. 205 

2-2 The 83 rd Meeting of the Economic and Social Council………………. 206 

2-3 Meeting on Arab Strategy for Using New and Renewable Energy…… 207 

2-4 Meeting of the Higher Coordination Committee for Joint Arab 

Action………………………………………………………………… 207 

2-5 The Arab Electricity Experts Meeting………………………………... 208 

2-6 Committee Meeting for Institutions Involved in Preparation of the 

Joint Arab Economic Report,2009…………………………………… 209 

2-7 The 84 th Meeting of the Economic and Social Council………………. 209 

2-8 4 th Meeting of the Energy Statistics Committee……………………… 209 

2-9 Conference on Arab-Sino Cooperation in Energy……………………. 210 

2-10 Preparatory Meeting on Compiling the Joint Arab Economic 

Report,2010…………………………………………………………. 211 

2-11 2 nd Kuwait Waste Management Conference and Exhibition………… 211 

2-12 The Second Middle Eastern and North African Carbon Forum…….. 212 

2-13 5 th International Conference and Exhibition for Oil and Gas………... 212 

2-14 15 th Meeting of Climate Change Subcommittee…………………….. 213 

2-15 GCC Conference on Investment Oil, Gas, and Petrochemical 

Industries During the World Financial Crisis…………………… 214 

2-16 International Petroleum Technologies Conference…………………. 214 

2-17 5 th Workshop of the International Lithosphere Program…………….. 215 

2-18 Small and Medium-Sized Oil Industries Conference and Exhibition.. 215 

2-19 Meeting of the Conference of the Parties and the Conference of the 

Parties Serving as the Meeting of the Parties to the Kyoto Protocol.. 216

Contents 

III. Energy Resources Monitor-Arab and International………………..…… 217 

IV. The Promotion of Scientific Research ……..…………..….……….....…… 217 

VI. Supporting Activities………………………………………………………..... 218 

1. Media Activities ……….…….…….….………….……………….……… 

218 

1-1 Editing, Printing, Publishing, and Distribution …..….….....….…… 

1-2 Press and Media…………………. …….…..…………………….…… 

1-3 34th Arab Book Fair……………….. ………….…….…..………….. 

2. Administrative and Financial Activities………………... ………..….. 

219 

2-1 Evolution of the Administrative Structure……………. ….…..….… 

2-2 Evolution of Actual Expenditure …….…..…………..….…….…… 

218 

218 

218 

219 

219 

CHAPTER THREE: OAPEC-SPONSORED VENTURES 

I. The Arab Maritime Petroleum Transport Company (AMPTC)............. 

229 

II. The Arab Shipbuilding and Repair Yard Company (ASRY)….............. 231 

III. The Arab Petroleum Investments Corporation (APICORP).….............. 

233 

IV. The Arab Petroleum Services Company (APSCO).........…...…………… 240 

1. Arab Drilling and Workover Company (ADWOC).............….…..… 

241 

2. Arab Well Logging Company (AWLCO)…………….………………. 244 

3. Arab Geophysical Exploration Services Company (AGESCO) … 246 

APPENDICES 

I. Press Releases of OAPEC Ministerial Council Meetings in 2009……. 251 

1- The 82 nd Meeting of OAPEC’s Council of 

Ministers…………………………………………………………………... 251 

2- The 83 rd Meeting of OAPEC’s Council of Ministers……… 251 

II. Meetings and Seminars Sponsored or Attended by the General 

Secretariat,2009…………………………………………………………... 254

Contents 

TABLES 

PART ONE 

CHAPTER ONE 

1-1 Total & Annual changes in World Oil and NGLs Supply,2005 - 

2009............................................................................................... 39 

1-2 Growth in the World Economy and Oil Demand by Region, 2005- 

2009.....................................................................................................….. 40 

1-3 World Economic Growth, 2005-2009…………………………………... 41 

1-4 Total & Annual Change in World Oil Demand, 2005- 

2009…….................................................................................................. 42 

1-5 World Oil Demand by Region, 2005-2009………………………….. 43 

1-6 Total & Annual Change in Oil Demand in OECD Countries, 

2005-2009………..………………………………………..…………… 44 

1-7 Total & Annual Change in Oil Demand in Developing Countries, 

2005-2009…………………………………………………………….. 45 

1-8 Total & Annual Change in Oil Demand in Oil Demand in 

Countries in Transition, 2005-2009………...………………………. 46 

1-9 Spot Price of OPEC Basket of Crudes, 2005-2009………..….…… 47 

1-10 Average Spot Prices of the OPEC Basket and Selected Arab 

Crudes, 2005-2009…………………………………………………… 48 

1-11 Nominal and Real Prices of Crude Oil, 1995- 

2009…………………………………………………………………… 49 

1-12 Average Monthly Market Spot Prices of Petroleum Products, 

2008-2009…………………………………………………………….. 50 

1-13 Share of Tax in Gasoline Prices in some Industrial 

Countries,2008- 2009…………………………………………….... 51 

1-14 Spot Tanker Freight Rates, 2008-2009…………………………... 52 

1-15 OECD Oil Inventories at Quarter End, 2008& 2009...................... 53 

1-16 Value of Oil Exports in OAPEC Member Countries, 2005-2009... 54 

1-17 Value of OAPEC Oil Exports in Current and Real Prices, 1995- 

2009………………………………………………………..…...… 55 

1-18 Energy Consumption in the Arab Countries, 2005- 

2009………………………………………………………………. 56

Contents 

1-19 Per Capita Energy Consumption in the Arab Countries, 2005 and 

2009………………………………………………………………. 57 

1-20 Energy Consumption in OAPEC Member Countries, 2005-2009.. 58 

1-21 Energy Consumption in OAPEC Member Countries by Source, 

2005-2009……………………………...………………………… 59 

1-22 Petroleum Products' Consumption in OAPEC Member Countries, 

2005-2009 ……………………………………………………….. 60 

1-23 Natural Gas Consumption in OAPEC Member Countries, 2005- 

2009………………………………………………………………. 61 

1-24 Hydroelectricity Consumption in OAPEC Member Countries, 

2005-2009………………………………………………………... 62 

1-25 Coal Consumption in OAPEC Member Countries, 2005-2009….. 63 

1-26 Domestic Prices of Petroleum Products in OAPEC Member 

Countries, 2009…………………………………………...……… 64 

1-27 Domestic Prices of Petroleum Products in OAPEC Member 

Countries, 2009…………………………………………………... 65 

CHAPTER TWO 

2-1 Seismic Surveys Worldwide, 2005-2009........................................... 111 

2-2 Average Number of Active Rigs Worldwide, 2005-2009…………. 112 

2-3 Petroleum Discoveries in OAPEC Members and Other Arab 

Countries, 2005- 2009.................................................................... 113 

2-4 Arab and World Oil Reserves, 2005-2009………………….…….. 114 

2-5 Arab and World Natural Gas Reserves, 2005-2009………………. 116 

2-6 Arab and World Hydrocarbon Liquids Production, 2005-2009…… 118 

2-7 NGL Production in OAPEC Members and Other Arab Countries, 

2005-2008…………………………………………………………. 120 

2-8 Arab and World Marketed Natural Gas, 2005-2008………………. 121 

2-9 World Coal Reserves, 2005-2008…………………………………. 123 

2-10 World Coal Production, 2005-2008……………………….………. 124 

2-11 Nuclear Power Reactors in Operation and Under Construction 

Worldwide ………………………………………………………... 125 

2-12 Installed Hydro Power Capacities in Some Countries, 2006 and 

2007……………………………………………………………………. 127

Contents 

2-13 Installed Wind Power Capacities in Some Countries 2007,2008…. 128 

2-14 Cumulative Installed Photovoltaic Power Capacities in Some 

Countries, 2007 and 2008……………………………………………. 129 

2-15 Installed Geothermal Capacities in Some Countries, 2007 and 

2008…………………………………………………………………….. 130 

2-16 Solid Biomass Installed Capacities in Some Countries, 2006 and 

2007……………………………………………………………………. 131 

CHAPTER THREE 

3-1 World Existing Topping Distillation Capacity by Region, 2008- 

2009 …………………………………………………………………..... 167 

3-2 World Catalytic Conversion Capacity by Region, 2008-2009…….. 168 

3-3 Regional Catalytic Conversion Capacity by Process, 2008-2009..... 169 

3-4 World Coke Production Capacity from Thermal Conversion 

Process by Region, 2008-2009………………………………..…....... 170 

3-5 World Hydrotreating Capacity by Region, 2008 and 2009…….…. 171 

3-6 Installed Refining Capacity in the Arab Countries, 2005-2009…... 172 

3-7 New Refinery Construction Projects in OAPEC Member 

Countries….............................................................................................. 173 

3-8 New Refinery Construction Projects in Other Arab Countries......... 174 

3-9 World Top 10 Ethylene Complex ………............................................ 175 

3-10 World Ethylene Capacity by Region, 2007-2008…………............... 176 

3-11 World Ethylene Production Capacity by Country…………….....… 177 

3-12 Top 10 Ethylene Producers………................................……….. 179 

3-13 Consumption of Natural Gas by Region, 2007-2008…………...... 180 

3-14 Share of Natural Gas in the Total Consumption of Commercial 

Energy by Region, 2005-2008...........................................….......… 181 

3-15 Natural Gas Exports by Region, 2007 and 2008................................. 182 

3-16 World Natural Gas Exports by Region, 2007-2008............................ 183 

3-17 Arab Natural Gas Exports 2004-2008.............................................. 184 

3-18 Average World Natural Gas Prices 2004-2008................................ 185 

PART TWO 

CHAPTER ONE 

5-1 Publications Issued and Distributed by the General Secretariat in 

2009 224 

5-2 General Secretariat Employees, 1968-2009 225 

5-3 General Secretariat Actual Expenditure by Budget Category, 

1968-2009 226

Contents 

PART ONE 

FIGURES 

CHAPTER ONE 

1-1 World Supplies of Oil and NGLs, 2005-2009…………...…….. 5 

1-2 Annual Change in World Supplies of Crude Oil and NGL’s, 

2005-2009………………………………………………………... 7 

1-3 World Economic and Demand Growth 2005-2009…..............….. 8 

1-4 World Economic Growth 2008-2009…………………………………. 9 

1-5 World Oil Demand, 2005-2009………………………………………. 10 

1-6 Distribution of World Oil Demand by Region, 2005-2009……… 11 

1-7 OECD Demand for Oil by Region, 2005-2009…………………. 12 

1-8 Weekly Movement of OPEC Basket of Crudes, 2009………….. 14 

1-9 Annual Average Prices of OPEC Basket, U.S. Crude, Brent, and 

Dubai for the period 2005-2006.................................................... 16 

1-10 Premium Gasoline Prices, 2008-2009…………………………... 18 

1-11 Gasoline Prices in some OECD Countries, November 2009………… 18 

1-12 US SPR at Quarter End, 2008-2009…………………………….. 21 

1-13 Monthly Oil Prices and Value of OAPEC Oil Exports January- 

December, 2009…………………………………………………. 22 

1-14 Arab Countries GDP in Current Prices 2005-2008……………………. 23 

1-15 Per Capita GDP of Arab Countries in Current Prices, 2005-2008 24 

1-16 Energy Consumption in the Arab Countries by Source, 2009………… 26 

1-17 Per Capita Energy Consumption in the Arab Countries, 2009….. 27 

1-18 Energy Consumption in Arab Countries and the World, 2008… 27 

1-19 Breakdown of Petroleum Product Consumption in the Arab 

Countries, 2009…………………………………….……………. 28 

1-20 Oil Consumption in the Arab Countries and the World, 2008………… 29 

1-21 Natural Gas Consumption in the Arab Countries and the World, 

2008………………………………………………………. 30 

1-22 Energy Consumption in OAPEC Member Countries, 2005-2009…... 32 

1-23 Per Capita Energy Consumption in OAPEC Member 

Countries,2009………………………………………………….. 32

Contents 

1-24 Energy Consumption in OAPEC Member Countries by Source, 

2009………………………………………………………………. 33 

1-25 Natural Gas Consumption in OAPEC Member Countries, 2005- 

2009……………………………………………...……………….. 34 

1-26 Natural Gas Consumption as a percentage of Total Energy 

Consumption in OAPEC Member Countries,2009……………… 35 

CHAPTER TWO 

2-1 Seismic Surveying Activity in Different Parts of the World, in 

2005-2009…………………………………………………..………… 85 

2-2 Active Drilling Rigs Worldwide,2004-2009……….………..…… 86 

2-3 Distribution of Active Drilling Rigs Worldwide, 2009………..… 86 

2-4 Oil Discoveries in OAPEC Member Countries and Other Arab 

Countries, 2005-2009………………………………………..…….… 87 

2-5 Gas Discoveries in OAPEC Member Countries and Other Arab 

Countries, 2005-2009…………………………………………..……. 87 

2-6 World Oil Reserves by International Grouping, End 2009…….… 89 

2-7 The Evolution of Oil Reserves in OAPEC and OPEC Member 

Countries, 2005-2009…………………………………..……………. 89 

2-8 World Natural Gas Reserves, End 2009 ………………………..…. 90 

2-9 The Evolution of Natural Gas Reserves in OAPEC and OPEC 

Member Countries, 2005-2009……………………………..……. 91 

2-10 World Oil Production by International Grouping, 2009................. 93 

2-11 Oil Production Rates in OAPEC and OPEC Member Countries, 

2005-2009………………………………………………..………. 94 

2-12 Marketed Natural Gas by International Grouping, 

2008……………………………………………………….....…... 96 

2-13 Marketed Natural Gas in OAPEC and OPEC Member Countries, 

2005-2008.............................................................................................. 97 

2-14 World Coal Reserves, End 2008…………………………...….…. 98 

2-15 World Production of Hard Coal, 2008…………………...………. 99 

CHAPTER THREE 

3-1 Development of World Refining Capacity and the Number of 

Refineries 2001-2009……………………………………………...….. 133 

3-2 World Primary Distillation Capacity by Region, End of 

2009………………………………………………………………..….... 135

Contents 

3-3 World Catalytic Reforming Capacity by Region, End of 2008…..... 135 

3-4 World Catalytic Reforming Capacity by Region, End 2008- 

2009…………………………………………………………………….. 136 

3-5 World Catalytic Cracking Capacity by Region, End 2008- 

2009……………………………………………………………….……. 137 

3-6 World Hydrocracking Capacity by Region, End 2008 - 

2009………………………………………..…………………….... 138 

3-7 World Capacity for Producing Coke From Thermal Conversion 

Processes by Region, End of 2009 ………………………………...… 139 

3-8 Distribution of Hydrotreating Capacity by Region, 

2009…………...…………………………………………………...….... 139 

3-9 Evolution of Primary Distillation Capacity in the Arab Countries, 

2005- 2009……………..……………………………………………… 140 

3-10 World Existing Ethylene Production Capacity by Region, End of 

2008……………………………………………………….…….……… 146 

3-11 Ethylene Production Capacity in the Middle East………………… 146 

3-12 Distribution of Total Existing Ethylene Capacities, end of 

2008……………………………………………………………….. 147 

3-13 Natural Gas Consumption by Region, 2008……………...……….. 154 

3-14 Share of Natural Gas in the Total Consumption of Commercial 

Energy, 2005-2008…………………………..…………………….. 154 

3-15 Natural Gas Export Worldwide, 2008………………………….…. 156 

3-16 Natural Gas Export Worldwide, 2007-2008………………………. 156 

3-17 Arab Natural Gas Export, 2008………………...…………………. 157 

3-18 World Prices of Natural Gas, 2003-2008…………………………. 158

PREFACE 

As the thirty-sixth Report rolls off the press, the repercussions of the global financial 

crisis are still casting shadows over the world economy, and particularly over the oil 

industry and its markets. It is true that supply/demand and prices are now relatively stable 

following the huge storm that affected them in the last quarter of 2008 and the first months 

of 2009. The fall in demand and prices severely affected the social and economic 

circumstances of the petroleum exporting countries in general. It particularly affected the 

Arab oil exporting countries, where petroleum is still a major national asset and the 

backbone of their economies, because it constitutes a principal source of revenue, a large 

part of their foreign trade, and an essential factor in their annual budgets. 

It is a fact that the petroleum industry plays an important role in the social and economic 

stability of many Arab countries, both exporters and other countries that benefit indirectly, either 

through worker remittances, trade, or bilateral or joint Arab projects. OAPEC members' revenues 

from oil exports in 2009 totaled just $352.8 billion, which was $232.5 billion (or 39.7%) less than 

in 2008, when they totaled $585.3 billion. In real terms, the 2009 revenues were no more than 

$278 billion in 1995 prices. 

The drop in revenues was due to the continued pressure of the global economic financial 

crisis on oil and natural gas prices throughout 2009, making them fluctuate. The annual average 

of spot prices for the OPEC basket of crude oils dropped 33.4% from $94.4/b in 2008 to about 

$61/b in 2009. The average basket price ranged from $42.9/b in the first quarter of 2009 to 

$74.3/b in the last quarter. 

However, the drop in revenues has affected more than the current economic position of 

Arab countries. It has also cut deeply into the projects for expanding crude oil production 

capacity that Arab countries had planned to meet the forecast rise in world oil demand in the 

coming twenty years. These projects have either been delayed or postponed until the local and 

global economies show signs of recovery. 

Just as the world financial crisis affected petroleum revenues and oil prices, it also affected 

natural gas. It had a negative impact on supply, demand and consumption as world economic 

growth declined. In the OECD countries it fell by 3.4%, in the countries in transition by 6.7%, 

and in Latin America by 2.5%. Only Asia escaped this fate, as it recorded a growth rate of 6.2%. 

As a result, world oil demand dropped 1.6% from 85.7 million b/d in 2008 to 84.3 million b/d in 

2009, or by about 1.4 million b/d. 

This Report presents and analyzes such issues from A to Z. It provides a clear picture of 

the various aspects of the petroleum industry and a more general picture of the energy industry. It 

highlights the efforts exerted by OPEC and its Arab member countries, which are also members 

of OAPEC, to mitigate the impact of the financial crisis on their countries. An outstanding 

example of these efforts was the participation of OAPEC's General Secretariat, as an observer, in 

the Arab Economic and Social Development Summit, which was held in Kuwait, 19-20 

January 2009. The summit was held in the presence and under the auspices of H.H. Sheikh Sabah 

Al-Ahmad Al-Jaber Al-Sabah, Amir of Kuwait, and with the participation of the kings and 

presents of Arab states. The General Secretariat presented a study entitled, 'The Global 

Financial Crisis and Its Probable Initial Repercussions for the Arab Petroleum Industry,' 

which was adopted as a working document of the summit. The General Secretariat also took part 

in many activities of a similar vein, such as the First Gulf Conference on Investments in Oil, Gas 

and Petrochemicals during the World Financial Crisis, which was held in Manama, Bahrain, 20- 

21 October 2009. The Secretary General's speech to this conference concluded that 'investments 

in all phases of the oil industry require stable oil markets and guaranteed demand for oil.'

The General Secretariat continued to exert every effort and to join other efforts aimed at 

fostering dialogue and consultation between the various entities and organizations representing 

petroleum exporting and importing countries, to the mutual benefit of all parties. 

On the other hand, the Report sheds light on the efforts exerted by member countries to 

develop the various phases of their oil industries, the projects they have implemented to promote 

sustainable development and use their oil revenues to improve their infrastructure and enhance 

their socioeconomic facilities. 

In the Chapter One we hope we have succeeded in presenting a clear analysis, backed up 

with statistics, of all aspects of the oil and energy industry. The two parts of this chapter exam 

developments and fluctuations in world markets and their impact on OAPEC member countries. 

They consider the factors influencing the market, including those related to market fundamentals 

such as supply, demand, and oil stocks, and those that influence market trends, such as 

geopolitical issues and the energy policies adopted by various political and economic blocs. The 

Report discusses price trends in 2009 and their impact on member countries' oil revenues, which 

constitute the engine behind their socioeconomic development. It goes on to review oil and 

energy consumption developments in OAPEC and other Arab countries, by primary energy 

source (oil, natural gas, coal, and hydroelectricity), final energy consumption by economic sector, 

and the latest developments in oil product prices in Arab countries. 

Chapter one of the Report also goes to review development in the Arab and world in the 

energy industry, from exploration and production of various energy sources, with particular focus 

on oil and gas, to downstream industries (refining and petrochemicals), the natural gas industry. 

Chapter two of the Report is devoted to examining OAPEC's activities in 2009, starting 

with the meetings of its Ministerial Council and Executive Bureau, moving on to the studies 

conducted by the General Secretariat and the Arab and international symposia, meetings, and 

conferences that it attended. It also contains a review of the achievements of OAPEC-sponsored 

ventures in 2009, as they worked assiduously, as usual, to overcome the fallout of the global 

economic crisis on the sectors in which they operate. Most of the ventures managed to strengthen 

their positions and raise their efficiency, despite the global financial crisis and its impact on their 

activities. 

In conclusion, we at the General Secretariat all hope that this Report in its new format will 

depict features clearly so that the reader can build up a full and true picture of the activities and 

goals of the Organization of Arab Petroleum Exporting Countries. We hope that all readers, 

regardless of their specializations, will find it an enlightening addition to their petroleum 

literature. 

Abbas Ali Naqi 

Secretary General

PART ONE 

INTERNATIONAL DEVELOPMENTS 

IN OIL AND ENERGY 

CHAPTER ONE 

DEVELOPMENTS IN GLOBAL MARKETS AND 

THEIR IMPACT ON OAPEC MEMBER COUNTRIES 

FOREWORD 

The year 2009 witnessed the persistence and deepening of the global 

financial crisis, which had begun in August 2007 when the high-risk 

subprime mortgage market collapsed in the US, and escalated with the 

successive series of landslides in the capital markets and the collapse of 

banking institutions in August 2008. The situation in global financial 

markets had a negative impact on the real economy of different countries. 

The oil market was not immune from developments in the global 

economies. They had a clear impact on world demand for oil, levels of oil 

inventories, prices and value of OAPEC’s member countries oil exports, 

which is the main engine of socioeconomic development. 

The year 2009 commenced with further deterioration and financial 

chaos. The world economy underwent its worst economic recession since 

the thirties with a sharp decline in GDP in the industrialized countries, and 

a slowdown in the growth rate of developing countries. 

This situation made it necessary to adopt a new measures to rescue 

and stimulate the financial systems, whether at the level of individual 

countries, in particular in industrialized countries, or at the level of global 

financial institutions within a framework of international coordination. 

These steps were taken in order to assure market stability and minimize the 

impact of the global financial crisis and avoid its repetition. 

As the 2009 year proceeded, world economies began to show signs of 

recovery, especially in the second half of the year. This in turn led to a 

gradual recovery in growth rates of global oil demand at the start of the 

second half, with the third quarter of 2009 showing a clear gain over the 

second quarter of the same year.

Despite the atmosphere of optimism, average global oil demand in 

2009 dropped by 1.6% compared with the previous year. 

The oil market in 2009 witnessed the halting of the downward trend in 

prices in the beginning of the year followed by an upward change later in 

the year. The trend changed despite some setbacks related to the depressed 

economic conditions and high levels of global oil inventories . OPEC 

basket prices during 2009 improved reaching levels ranging from about 

$65 to over $ 75 / barrel in the last seven months of the year, compared with 

about $40/barrel at the beginning of the year. The average OPEC basket 

price, however, dropped by $ 33 / barrel in 2009 compared with 2008 to 

reach $ 61/barrel. 

OPEC’s attentive monitoring of the oil market played an important 

role in the prices’ stability during the year. The stability may be attributed 

also to the evolution of the value of dollar and its impact on investment and 

speculations, and to the positive signs of economic growth in Asia region 

and particularly in Chinese and Indian economies. 

Chapter One of the Report addresses: the core features of the oil 

market, the major factors that affecting it, and their impact on the value of 

oil exports. It also reviews oil and energy consumption developments in the 

Arab countries in general, and OAPEC members in particular. 

I. MAJOR DEVELOPMENTS IN THE WORLD OIL 

MARKET IN 2009 AND RELATED FACTORS 

In order to examine the key developments in the oil market in 2009, 

the following section reviews various aspects of the market, in particular, 

world oil supplies, world oil demand, trends of crude oil and major oil 

products’ prices, crude oil freight rates, changes in global oil inventories, 

and their impact on the value of OAPEC members’ oil exports. 

1. Supplies 

Average oil supplies (crude oil and natural gas liquids) in 2009 

declined for the first time since 2002,by 1.5 million b/d, or 1.7%, compared 

with the previous year, to 84.5 million b/d, as shown in Table (1-1) and 

Figure (1-1).

In the first quarter of 2009, world oil supplies fell sharply by about 1.3 

million b/d below the last quarter of 2008, falling to 84.0 million b/d. Then 

supplies declined again in the second quarter by 200,000 b/d, but in the 

third and fourth quarters they changed course, soaring by 800,000 b/d and 1 

million b/d, respectively, to reach 85.5 million b/d at the end of the year. 

Evidence of an impending the end of worst global financial crisis has 

positively affected the oil market, since world oil supplies witnessed an 

increase of 1 million b/d in the second half of 2009 compared to their first 

half. 

Figure 1-1 

World Supplies of Oil and NGL’s, 2005-2009 

(Million b/d) 

1-1 OPEC Supplies 

In 2009 OPEC countries' oil supplies (crude oil and NGLs) dropped 

by 2.0 million b/d, or about 5.6 %, to stand at 33.5 million b/d. This decline 

came after the recorded increase of 1.4 million b/d in the previous year of 

2008. The fall in 2009 brought OPEC countries’ share of total world oil 

supplies to 39.6%, compared with 41.3% in the previous year, as shown in 

Table (1-1). 

OPEC supplies of natural gas liquids and unconventional oils rose 

from 4.5 million b/d in the first quarter of 2009 to 4.9 million b/d in the 

fourth quarter. On the other hand, OPEC supplies of crude oil increased 

from 28.5 million b/d to 29.0 million b/d in the same period. This attributed 

mainly to the signs of improvement in the global economy and its positive 

impact on global oil demand.

It is noteworthy in this context that OPEC members faced many 

challenges in 2009, especially in the first half, including the continuing 

decline in world oil demand as a result of the global recession, and low oil 

prices levels compared with the corresponding period of the previous year, 

which had a negative impact on OAPEC members’ value of oil exports. 

In order to combat the challenges, OPEC held two extraordinary 

meetings in the course of 2009, in addition to its two ordinary meetings. 

OPEC members initiated earlier this year significant cut in their production 

in response to the decisions taken by the Organization in December 2008, to 

conduct the total quota cuts in 2008 effective from 1 st of January 2009 to 

4.2 million b/d. 

Through frequent monitoring of the global oil market situation, the 

Organization choosed to keep production quotas unchanged for the whole 

year, which was a decisive factor in curbing the decline in prices in spite of 

negative economic growth rates and the subsequent decline in demand 

during the first half of 2009. Below are some details about the meetings of 

the Organization during the year: 

- In light of the continuing repercussions of the financial crisis on oil 

demand and the abundance of oil supply, OPEC held its first ordinary 

meeting at its headquarters in Vienna on 15 March 2009, and agreed to 

keep production quotas unchanged and to take all measures necessary to 

maintain the stability of oil market. 

- At OPEC's first extraordinary meeting of the year, held in Vienna on 28 

May 2009, it was noted that the oil market is well supplied and that 

commercial oil stocks were at high levels, higher than the average of last 

five years and similar to record level reached in February 1998. The 

OPEC Conference therefore decided once again to keep production 

quotas unchanged and reiterated member countries commitment to 

market stability and ensuring sufficient supplies. 

- In its second ordinary meeting on 10 September 2009, OPEC noted that 

despite signs of improvement in the global economy, there is still 

concern on the speed of the recovery, especially in the major 

industrialized economies. Accordingly, since the market remains oversupplied 

and given the downside risks associated with extremely fragile 

recovery, the Conference once again agreed to keep quotas unchanged. 

- The second extraordinary meeting convened in Luanda, Angola, on 22 

December 2009. In light of the stability in world oil market during the 

last few months on one hand, and the lack of clarity of how strong and 

durable the global economic recovery might be on the other hand, OPEC 

decided for the fourth time during the year to maintain the production 

ceiling unchanged.

1-1 Non-OPEC Supplies 

Non-OPEC oil supplies totalled 51 million b/d in 2009, a level that is 

500,000 b/d higher than a year ago, compared to non- increase in 2008, as 

shown in Table (1-1). 

It is noteworthy that the bulk of the increase in Non-OPEC oil 

supplies, which was aimed at preserving production despite the traditional 

decline experienced by some groups, came from the United States, which 

increased production by less than 500,000 b/d in 2009 compared with 2008. 

Brazil’s production rose by 150,000 b/d and Former Soviet Union 

supplies increased by 360,000 b /d. 

In contrast OECD oil supplies declined by about 50,000 b/d to 19.5 

million b/d in 2009, while that of developing countries rose by 150,000 b/d. 

Figure (1-2) shows the annual change in oil supplies from OPEC and 

non-OPEC producers in 2005-2009. 

Figure 1-2 

Annual Change in World Supplies of Crude Oil and NGL’s, 2005-2009 

(million b/d) 

2. World Oil Demand 

For the first time since the early 1980’s, year 2009 witnessed a 

continued decline in global oil demand for the second successive year due 

to the negative consequences of global financial crisis on the global 

economy. This highlighted the close link between world economic growth

ates and world oil demand growth rates. The sharp drop in world economic 

growth rates from 3.0% in 2008 to negative 1.1% in 2009 was accompanied 

by a sharp decline in world oil demand growth from -0.3% in 2008 to 

-1.6% in 2009. 

Figure (1-3) and Table (1-2) show the annual rates of growth in 

world oil demand compared with world economic growth rates. 

Figure 1-3 

World Economic and Demand Growth 2005-2009 

(%) 

Most economies witnessed significant decreases in their growth rates, 

although to varying degrees, due to several factors, including how closely 

each economy related to the U.S. economy. 

In terms of international groupings, the economic growth rate of 

OECD countries, which account for about 54% of world oil demand, fell 

from 0.6% in 2008 to -3.4% in 2009. 

Among the OECD countries, the annual growth rate of US economy 

declined to -2.5%, while the rate of growth in the Japanese economy fell 

from -0.7% in 2008 to -5.3% in 2009. The growth rate of the euro zone 

economies dropped from 0.7% to -3.9% in the same period. 

The countries in transition witnessed a decline in their economic 

growth rates from 5.5% in the previous year to -6.7% in 2009.

The developing countries maintained positive growth in 2009 despite 

of the decline in annual economic growth rate from 6% in 2008 to 1.7% in 

2009. 

The African countries, which account for 3.3% of world oil demand, 

recorded a decline in their economic growth rate from 5.2% in 2008 to 

1.7% in 2009. Latin American countries also witnessed a decline in their 

economic growth rate from 4.2% in 2008 to -2.5% in 2009, as shown in 

Figure (1-4) and Table (1-3). 

By tracking the growth rates of world oil demand in 2009 one can 

clearly notes that they fluctuated in response to the slowdown and 

subsequent recession in the global economy as a whole. In particular, 

during the first half of 2009 and then in the beginning of the economic 

upturn in the second half of the same year. 

Figure 1-4 

World Economic Growth 2008-2009 

(%) 

The second quarter of 2009 has witnessed the lowest level of demand 

(83.1 million b/d) which is 0.9 million b/d lower than the first quarter of the 

year. 

In the third quarter, the growth was up by 1.7 million b/d over the 

second quarter, this trend continued in the fourth quarter of the year when 

demand increased by 0.6 million b/d compared to the third quarter to reach 

85.4 million b/d.

At the beginning of the first quarter of 2009, OPEC’s forecast 

indicates a drop in world oil demand by 0.2 million b/d, but the forecast had 

been revised during the course of the year to more sharp declines, -1.6% 

and -1.65% by the end of second quarter and third quarter of the year 

respectively. At the beginning of the fourth quarter the forecast was revised 

downwards to 1.4 million b/d as an average growth for the year 2009. 

Low economic growth rates had a negative impact on world oil 

demand growth, which dropped by 1.4 million b/d, or 1.6%, below its 

2008 level. This was the lowest growth rate since the early 1980’s. World 

demand for oil in 2009 totalled 84.3 million b/d, as shown in Figure (1-5) 

and Table (1-4). 

Figure 1-5 

World Oil Demand, 2005-2009 

(million b/d) 

The level of oil demand varied from one international grouping to 

another. Whilst it dropped sharply in the OECD countries in 2009 by 1.9 

million b/d from 2008 to 45.7 million b/d and in the countries in transition 

by 100,000 b/d, it rose in the developing countries by about 0.6 million b/d. 

The change in demand levels of each grouping altered their shares in 

total world demand in 2009. 

The share of the OECD countries declined from 55.5% in 2008 to 

54.2% in 2009, while that of the developing countries rose from 38.7% 

to 40.1%, and the share of countries in transition from the total world 

demand remained unchanged at 5.7%, as shown in Figure (1-6) and 

Table (1-5).

Figure 1-6 

Distribution of World Oil Demand by Region, 2005-2009 

(%) 

Developments in world oil demand are examined by international 

grouping below. 

2-1 OECD Countries 

The OECD countries’ demand for oil in 2009 declined by 

1.9 million b/d (or -4.0%) from its 2008 level to 45.7 million b/d. More 

than 47% of the total decline occurred in North American countries, 

where demand fell by 0.9 million b/d to 23.3 million b/d. In West European 

countries demand fell by 0.5 million b/d to 14.8 million b/d, and demand 

in Asian industrial countries also fell by 0.5 million b/d to 7.6 million b/d, 

as shown in Figure (1-7) and Table (1-6). 

The slide in oil demand in the members of the Organization for 

Economic Cooperation and Development was clearly due to the impact of 

the global financial crisis on their economic performance, combined with 

another factors including the high degree of efficiency in energy use. The 

decrease in Japan was due to the growing use of nuclear energy in the 

generation sector after the completion of some nuclear facilities in addition 

to the use of natural gas in the mentioned sector. 

An analysis of OECD oil demand in quarterly basis in 2009, OPEC 

estimates show a decline of 300,000 b/d in the last quarter compared with 

the first quarter, representing a drop of about 1.2 million b/d, or 2.5% lower 

than the same quarter of 2008.

The major contribution made by OECD countries to world oil demand 

reflected in the decline of world demand in the fourth quarter of 2008 which 

decreased by about 1.4 million b/d from the first quarter and by about 

100,000 b/d compared with the same quarter of 2008. 

Figure 1-7 

OECD Demand for Oil by Region, 2005-2009 

(Million b/d) 

2-2 Developing Countries 

Although demand for oil in the developing countries in 2009 rose by 

0.6 million b/d above its 2008 level to reach 33.8 million b/d a level that 

never reached before, the annual rate of growth declined from 4.0% in 2008 

to 1.8% in 2009. It is noteworthy that Demand in the developing countries 

is the main driver of world oil demand, as it rose by 4.5 million b/d between 

2005 and 2009. 

Among this grouping, demand in the Middle East and Africa rose by 

200,000 b/d to 10.3 million b/d, of which the Arab countries accounted for 

5.6 million b/d, and the total increase of the region’s demand and about 

33.3% of total demand in the developing countries. The increase was 

largely due to high economic growth rates in most countries of the region, 

in contrast to other countries of the world. 

Half of the increase in the Arab countries demand occurred in OAPEC 

member countries, where demand rose by 2.1% from 4.7 million b/d in 

2008 to 4.8 million b/d in 2009. Demand in other Arab countries accounted 

for rest of the increase, where it rose from 0.7 million b/d in 2008 to 0.8 

million b/d in 2009.

Demand in the Asian developing countries rose by 400,000 b/d to 17.7 

million b/d in 2009. Chinese demand, which is the main engine of Asian 

economic growth and recovery, accounted for 46.3% of total demand in the 

Asian developing countries, and responsible for 50% of the increase in 

demand of the Asian developing countries and for 33% of the increase 

among all developing countries. Chinese demand rose by 200,000 b/d to 

8.2 million b/d in 2009. Chinese levels of domestic consumption and 

industrial output began to rise early in 2009. Besides, the use of China's 

economic stimulus program to upgrade its infrastructure has led to 

increasing demand for some heavy petroleum products, such as asphalt, in 

addition to the high demand for other products, such as gasoline, gas oil and 

naphtha which used as feedstock in petrochemical industry. 

India's economy, the other engine for Asian economies’ growth, saw a 

rise in demand for oil by 100,000 b / d to 3.2 million b / d in 2009. This was 

mainly due to the dependency of the Indian economy primarily on service 

and technological industries. While demand in the Latin American 

remained unchanged from its previous level of 5.8 million b/d, as shown in 

Table (1-7). 

2-3 Countries in Transition 

Oil demand in the countries in transition totalled 4.8 million b/d in 

2009, which was 100,000 b/d, or 2.0%, lower than the previous year. 

Demand in the FSU, which reached 3.2 million b/d in 2009, accounted for 

the whole decrease. Demand in the countries of Eastern Europe remained 

unchanged from previous level at 0.8 million b/d in 2009, as shown in 

Table (1-8). 

3. Price Trends 

3-1 Crude Oil Prices 

Despite the upward trend of oil prices in the course of 2009, their 

annual average rate declined for the first time since 2001. Price of OPEC 

basket of crudes fell by $33.4/b, or 35.4%, as the spot price averaged $61/b, 

compared with $94.4 in 2008. 

There was a wide disparity in the quarterly average prices in 2009. In 

the first quarter the average was about $42.9/b, representing a drop of 

$9.6/b or 18.3%, compared with the fourth quarter of previous year, rising 

in the second quarter by $15.6/b, or 36.4%, compared with the first quarter 

to $58.5/b. Then it rose by about $9.2/b, or 15.7% in the third quarter, to 

$67.7/b. However, in the last quarter it went up to $74.3/b, representing an 

increase of $6.6/b or 9.7%, compared with the third quarter.

Monthly average price of the OPEC basket remained above the $50/b 

level since April, and at the $65/b level or more during the period June – 

December 2009. 

The difference between the highest level of average price of the OPEC 

basket in 2009 which recorded in November ($76.3/b) and the lowest in 

February ($41.4/b) amounted to $34.9/b, compared to a difference of 

$92.6/b in 2008. Figure (1-8) shows the weekly movement of the OPEC 

basket price. 

Figure 1-8 

Weekly Movement of OPEC Basket of Crudes, 2009 

($/b) 

One of the things became a milestone in the oil market in 2009 was 

the start of the upward trend of prices in the beginning of the year, 

particularly since March 2009, under conditions of the worst economic 

recession known since the thirties of the last century. Prices of oil were up 

despite of the decline in demand and the build up in global oil stocks which 

reached a level above the five years average. It is no longer unusual to see 

oil prices rising in conjunction with the rise in oil stocks. 

The upward trend continued to reach a state of relative stability during 

the last seven months of the year, despite some fluctuations and downturns 

in July, September and December, where average OPEC basket price varied 

from $65/b to more than $75/b during the period. 

Escalation of prices was due to several factors including ones that has 

to do with market fundamentals, while others, is outside the scope of that:

• Organization of Petroleum Exporting countries' efforts played a key role 

in restoring balance and stability in the oil market, as the significant 

reduction in production carried out by OPEC from the beginning of 

January 2009 was a decisive factor behind the downward trend in prices 

since the beginning of the year. The continued application of OPEC’s 

reduction throughout the year helped reducing the surplus in supply in oil 

market. 

• International determination to confront the crisis and the actions taken by 

some countries towards stimulate their economies had a positive reflection 

on oil demand. At the same time, it contributed in spreading the spirit of 

optimism that the worst of the crisis had ended in a faster pace than 

expected. 

• The confidence generated by both producing and consuming countries 

alike on the need to stabilize prices at a level higher than it was in the 

beginning of the year to ensure the necessary investments for the oil 

industry on the one hand, and not adversely affect world economic growth 

on the other. 

• The impact of U.S. dollar devaluation against other major prices, in light 

of the inverse relationship between oil prices and the dollar exchange rate, 

especially in recent years with the difference in the degree of change. 

• Speculations and investments played a key role in raising oil prices to 

levels difficult to interpret within the framework of market fundamentals, 

as the daily rates rose to levels more than $ 77/b for OPEC basket, and 

more than $ 8 /b for U.S. light crude. 

It is noteworthy, since the beginning of the year, the flow of liquidity 

to oil markets increased for different reasons, including storing oil in large 

tankers on the high seas waiting for higher prices, and hedging of the weak 

dollar and low return on investment in other assets. 

Year 2009 also saw significant developments in the pattern of price 

differentials, where the differentials between light sweet crudes and heavy 

sour crudes reduced to unusual levels compared with previous years. For 

example, the differential between Dubai crude (representing the heavy 

crudes) and U.S. light sweet crude reached around $0.1/b only in 2009 

compared with $5.8/b in the previous year. The price of Dubai was $0.2/b 

above Brent in 2009 while it was lower by $3.2/b in 2008. The same applies 

for the price of OPEC basket, which was $0.9/b lower than the price of U.S. 

light sweet crude in 2009 compared to $5.2/b higher in the previous year. 

The price of OPEC basket also $0.6/b lower than the price of Brent crude in 

2009 compared with $2.6 / b higher in 2008. 

Those developments in price differentials can be attributed to several 

factors, including:

• The focus of OPEC's cuts usually on the heavy crudes of high sulfur 

content because of their relatively low prices. 

• The infrastructure development projects included in the economic 

stimulus packages to address the economic crisis in some countries has 

resulted in an increase in demand for some heavy products as the case of 

increasing demand for asphalt in China. 

• The bottlenecks and logistical problems of U.S. light sweet crude have 

negatively affected its price during the year compared with other crudes 

prices, including light crude. The differential between U.S. light crude and 

Brent went down to $0.3/b in 2009, compared with $2.6/b in the previous 

year. These raised doubts about its continuation to be appropriate 

reference crude, that was the main reason behind replacing it with a basket 

of heavy America crudes as reference to the U.S. market by Saudi Arabia 

and Kuwait. 

Table (1-10) and Figure (1-9) show the developments of differentials 

among the annual average prices of OPEC basket, U.S. light crude, Brent 

and Dubai for the period 2005-2009. 

Figure 1 - 9 

Annual Average Prices of OPEC Basket, U.S Crude, Brent, and Dubai for 

the Period 2005-2009 

($/barrel) 

Spot prices for various Arab crudes followed the same general trend, 

since they fell in 2009 compared to their levels in 2008 with various 

degrees. However, the average price of light sweet crudes dropped more 

sharply than that of heavy sour crudes. This led to minimizing the 

differential between different crudes.

Algerian crude fell by $37.9/b or 38.3% compared to previous year to 

$61/b, while Kuwaiti crude fell by $31.9/b or 34.9% to $59.4/b. This led to 

minimizing the differential between the two crudes from $7.7/b in 2008 to 

$1.6/b in 2009. 

Saudi Arabian light crude fell by 37% to $60/b, the UAE’s Murban 

crude decreased also by 37% to $62.4/b, Libyan Sidra fell by 38% to 

$60.1/b. While Qatar Marine crude and Iraqi Basra declined by 35.7% and 

35.8%, to $61/b and $59.1/b respectively, as shown in Table (1-11). 

The nominal value of the decline in crude oil prices of $33.4/b 

during 2009 was only slightly different from its real record value measured 

in 1995 prices, after adjustment according to the index, which represents the 

GDP deflator of industrial countries. The real price fall amounted to $27/b, 

or 36%, to reach an average of $48/b during 2009, as shown in Table 

(1-11). 

3-2 Spot Prices for Oil Products 

There was a huge decline in the annual average prices of various oil 

products on all major markets in 2009, although the amounts varied 

according to the product and the market. 

3-2-1 Premium Gasoline Prices 

The average price of gasoline in the US Gulf in 2009 was $73/b, 

which was $37.2/b, or about 33.8%, lower than in 2008. In Mediterranean 

the average price fell to $57/b, a decrease of about $54.5/b, or 48.9%, 

below 2008, and in Rotterdam the average price dropped to $66/b, a 

decrease of about $32.3/b, or 32.9%, below 2008, whilst in Singapore it 

reached $69.2/b, which was $33.4/b, or about 32.6%, lower than in 2008. 

Consequently, the US market achieved the highest prices of all four markets 

in 2009, Singapore and Rotterdam came next, while Mediterranean 

achieved the lowest as shown in Table (1-12) and Figure (1-10). 

A comparison of final price of gasoline in some OECD countries 

showed that it was the lowest in US market, owing to the low taxes in 

that market. 

In November 2009, taxes amounted to about 15.1% of the final price 

of gasoline in USA, compared with 31.9% in Canada, 48.7% in Japan, 

54.5% in Spain, and over 60% in some other European countries 

(65.7% in Germany, 64.8% in UK, 64.2% in France, and 60.4% in Italy), 

as shown in Table (1-13) and Figure (1-11).

Figure 1-10 

Premium Gasoline Prices, 2008-2009 

($/b) 

Figure 1-11 

Gasoline Prices in some OECD Countries, November 2009 

($/litre) 

3-2-2 Gasoil/Diesel Prices 

Gasoil prices in 2009 were relatively high in most markets compared 

with gasoline and fuel oil, because gasoil is in demand throughout the year, 

especially in the transport, heating and cooling sectors. The highest

decrease occurred in US market, where gasoil prices were 44.6% lower than 

in 2008, as the average annual price rose to $67.2/b. The Rotterdam market 

came next with a decrease of 44.3%, bringing the average price to $69.8/b, 

then in Singapore the gasoil prices fell by 42.9%, giving an average price of 

$70.6/b, and finally on the Mediterranean where it fell by 38.6% to $76.9/b. 

3-2-3 Fuel Oil Prices 

Fuel oil prices chopped down in 2009 on all markets. On the US 

market the average price fell by 22.5% to $57.6/b, on the Singapore market 

it declined by about 25% to $57/b, on Mediterranean the average price of 

fuel oil fell 28% below 2008 to $55.8/b, while price on the Rotterdam 

market averaged $54.7/b, which was 30.7%, lower than in 2008. 

3-3 Oil Freight Rates 

Crude oil freight rates on all routes witnessed a sharp decline by over 

60% in 2009 compared with their 2008 levels for several reasons, on top of 

that was the global financial crisis. The financial crisis resulted in economic 

recession and a drop in oil demand which in turn led to a decline in global 

oil trade and subsequently a drop in the demand for all tankers. 

The average rate for oil shipments from Arabian Gulf ports to the East 

on VLCCs (230,000-280,000 dwt) was 41 points on the World Scale (WS) 1 . 

This was 95 points, or 70%, lower than in 2008. 

Freight rates for shipments from Arabian Gulf ports to the West, on 

crude carriers with a capacity of 270,000-285,000 dwt, averaged 30 points 

on the WS, which was 69 points, or about 69.7%, lower than in 2008, as 

shown in Table (1-14). 

In the Mediterranean region there was a similar decline in freight rates 

for small and medium-sized tankers (80,000-85,000 dwt). The average 

freight rate in 2009 was 80 WS points, which was 125 points, or about 61%, 

lower than in 2008. 

In January 2009 crude oil freight rates on the Arabian Gulf ports to 

East and West routes registered the highest level, to Average 58 and 41 WS 

points respectively. Then freight rates started to fall to reach their lowest 

level in April and May, after that they fluctuated up and down in the second 

half of 2009. In cross the Mediterranean route freight rates started with 106 

WS points and then they began to fall till reached their lowest level of 62 

WS points in April. Freight rates cross the Mediterranean route then 

changed course to reach their highest level of 111 WS points in June 2009. 

(1) World Scale is a method for calculating freight prices. One point on the WS means 1% of the standard price 

for freight that direction in the WS boo, which is published annually by the world scale association. It contains a list 

of prices in the form of dollars per ton, called “World Scale 100” for all the major routes in the world.

4. World Oil Inventories 

The year 2009 witnessed a significant rise in total world oil stocks 

(commercial and strategic) as they rose by about 168 million barrels, or 

2.5%, to 6973 million barrels at the end of December 2009. Crude oil 

stocks at sea, and independent stocks near consumption centers such as in 

Caribbean ports and the ports of Rotterdam and Singapore exceeded 1000 

million barrels at the end of 2009, totaling 1089 million barrels. 

Despite the significant increase in the commercial stocks of OECD 

countries, oil prices took upward trend from the beginning of the year 

which means non existence of the traditional relationship between stocks 

and prices. 

4-1 OECD Commercial Stocks 

OPEC’s decisions to cut production quotas which came in affect at the 

beginning of 2009 helped to lower the level of oil supplies and in turn 

affected the levels of commercial stocks in OECD countries in 2009. After 

the increase of total stocks by one million barrel in the second quarter of the 

year above their level in the first quarter, they rose once again in the third 

quarter by 28 million barrels above second quarter levels. 

In the last quarter of 2009 there was a significant decrease amounted 

to 86 million barrels compared with the previous quarter, bringing them to 

2688 million barrels at year end. 

In 2009, days of forward consumption of all commercial stocks in the 

OECD countries remained unchanged from last year level of 58 days, 

which is higher than the usual average. 

4-2 US Strategic Petroleum Reserve 

The US Strategic Petroleum Reserve (SPR) passed the 700 million 

barrel level for the first time in 2008, and continued to be above the 

mentioned level in 2009 as it totalled 726 million barrels at year end, 5 

million barrels higher than at the end of 2008. 

What is more, the SPR did not fall below the 713 million barrel mark 

throughout the year. After reaching 713 million barrels in the first quarter of 

2009, the SPR rose by 11 million barrels to 724 million barrels at the end of 

the second quarter, then rose slightly to 725 million barrels in the third 

quarter, and remained close to that level in the fourth quarter.

Since 2004, the US Administration has adopted a more flexible 

attitude toward releasing quantities of the SPR to compensate for any 

shortage of supply. This gives more importance to the commercial aspect of 

the SPR than the previous policy, which regarded the SPR as a last line of 

defence to be used only at times of major crisis. See Figure (1-12) and 

Table (1-15). 

The level of usable commercial stocks, which are the stocks kept by 

oil companies as a hedging measure to counter any sudden interruption of 

supplies or for speculation purposes when prices rise, rose by about 93 

million barrels, or 7.3%, at the end of 2009 to 1364 million barrels. 

Figure 1-12 

US SPR at Quarter End, 2008-2009 

(Million barrels) 

II. 

VALUE OF OAPEC MEMBERS’ COUNTRIES 

PETROLEUM EXPORTS 

The sharp drop of oil price in 2009, which amounted to $33/b, had a 

detrimental effect on the value of oil exports. It worth mentioning that oil 

exports are the main engine of socioeconomic development in the oil 

producing Arab Countries, the mainstay of their central bank reserves of 

foreign exchange, and the main source of their budget surpluses. 

Monthly data on the movement of oil prices and the estimated 

monthly value of OAPEC members’ oil exports may give a clear picture of 

the damage done by the drop in prices during the year, owing to the fallout 

from the global financial crisis, as shown in Figure (1-13).

Figure 1-13 

Monthly Oil Prices and Value of OAPEC Oil Exports, January-December 

2009 

($/b) 

A year-on-year comparison shows that the value of members’ oil 

exports chopped down by 39.7%, from $585.3 billion in 2008 to $352.8 

billion in 2009, or by $232.5 billion. An analysis of individual countries 

shows that the fall varied from one country to another. It ranged for 

example from 40%-56%,in the UAE, Algeria, Bahrain, Saudi Arabia, Qatar, 

Libya, and Egypt , while it was 32% in Syria, 30% in Iraq, and 27% in 

Kuwait, as shown in Table (1-16). 

The value of OAPEC members’ oil exports in real 1995 prices, after 

adjustment according to the index, which represents the GDP deflator of 

industrial countries, fell from $465.3 billion in 2008 to $278 billion in 2009, 

or by 40%, as shown in Table (1-17). 

III. DEVELOPMENTS IN OIL AND ENERGY 

CONSUMPTION IN THE ARAB COUNTRIES 

1. Arab Countries 

This section traces the developments in total energy consumption in 

Arab countries during the period 2005-2009 according to volume of 

consumption and relative importance of each energy source in meeting 

energy needs in the Arab countries in general and OAPEC member

countries in particular. The latest data were drawn mainly from the Country 

papers received on January 31, 2010, which will be presented to the ninth 

Arab Energy Conference. 

1-1 Total and Per Capita Energy Consumption 

Energy consumption growth in the Arab countries is affected by three 

key variables: GDP, population, and prevailing energy prices on local 

markets. The following paragraphs provide an overview of these variables. 

1- GDP: The global financial crisis which launched in the second half of 

2008 led to global economic recession in 2009. This situation had a 

negative impact on Arab economies as a whole, and on the petroleum 

economies in particular for the two following reasons: 

- The drop on world oil demand and on the levels of oil prices had led to 

significant drop on value of Arab countries oil exports, which is the main 

engine of economic and social development. 

- The decline in Arab revenues generated from the foreign investments. 

Data published in the Joint Arab Economic Report in December 2009 

indicate that most Arab countries achieved high growth rates despite the 

negative impact of financial crisis in the second half of 2009. The data 

showed that GDP growth rate in constant prices in Arab countries reached 

26.2% a level that never seen since 2000. GDP in Arab countries increased 

to $1899 billion in 2008, due to the rise in oil prices in the first half of the 

year. Figure (1-14) shows the development of Arab Countries’ GPD in 

Current Prices 2005-2008. 

Figure 1-14 

Arab Countries’ GPD in Current Prices 2005-2008 

($ billion)

The overall average energy intensity in the Arab countries was about 

5.4 kg of oil equivalent per $1000 of GDP in 2008. The Arab countries may 

be divided into three groups on basis of GDP in 2008 constant prices, as 

follows: 

a) Countries with a growth rate of less than 5.0%: The four countries in this 

group are Algeria (3%), Yemen (3.9%), Saudi Arabia (4.4%), and 

Tunisia (4.6%). 

b) Countries with a growth rate of 5%-10%: The 13 countries in this group 

are Mauritania (5.1%), Syria (5.2%), Morocco (5.4%), Jordan (5.6%), 

Djibouti (5.8%), Bahrain (6.1%), Oman and Libya (6.2%), Kuwait and 

Lebanon (6.3%), Egypt (7.2%), the UAE (7.4%), and Sudan (7.8%). 

c) Countries with a growth of over 10%: The two countries in this group are 

Iraq (10.9%) and Qatar (16.4%). 

The per capita GDP of Arab countries in current prices rose 17.1% in 

2005-2008 from $3647 in 2005 to $5858 in 2008. Eight countries had a 

higher per capita GDP than the overall average for the Arab countries, 

namely, Qatar ($70651), the UAE ($52574), Kuwait ($43046), Bahrain 

($21668), Oman ($20898), Saudi Arabia ($18898), Libya ($10520), and 

Lebanon ($7466). See Figure (1-15). 

Figure 1-15 

Per Capita GDP of Arab Countries in Current Prices, 2005-2008 

($) 

The Arab countries whose per capita GDP fell below the average of 

the Arab countries fall into two groups. The first is those with a per capita 

GDP in excess of $2000. The seven countries in this group are Algeria 

($4916), Tunisia ($3959), Jordan ($3630), Iraq ($3611), Syria ($2677), 

Morocco ($2632), and Egypt ($2192).

The second group comprises four countries with a per capita GDP less 

than $2000. They were Sudan ($1599), Yemen ($1181), Djibouti ($1131), 

and Mauritania ($1128). 

2- Population: The average population growth in the Arab countries 

during 2005-2009 was 2.36%, when the population of the Arab 

countries increased from 312 million in 2005 to about 342 million in 

2009. 

3- Prices: Several Arab countries in the recent years have resorted to 

raising the prices of oil products on the local market in order to reflect 

the adaptation of abolition of prices subsidies policies, and in response 

to the increase in international crude oil prices. 

1-2 Energy Consumption by Source 

The global financial crisis supported the downward trend in energy 

consumption growth in the Arab countries. In 2009, Total energy 

consumption in the Arab countries amounted to 10.6 million barrels of oil 

equivalent per day (boe/d) compared to 10.2 million (boe/d) in 2008, an 

increase of 3.2%. 

Energy consumption in the Arab countries is increasingly dependent 

on petroleum (oil and natural gas), which account for 98.2% of total energy 

consumption in Arab countries in 2009. Oil continues to be the main source 

of energy consumption in the Arab countries, despite the increasing use of 

natural gas. Oil meets over half the Arab countries energy requirements, 

accounting for 52.8% in 2009, compared with 45.4% for natural gas, 1.3% 

for hydroelectricity, and 0.4% for coal. 

Among non-OAPEC Arab countries oil plays an essential role in the 

energy mix, accounting for 78.6% of their energy needs, compared with 

50.3% in OAPEC member countries. On the other hand, natural gas plays a 

bigger role in OAPEC member countries, accounting for 48.3% of their 

total energy consumption, compared with 16.6% in other Arab countries, as 

shown in Figure (1-16) and Table (1-18). 

The disparity in energy consumption may be attributed to the differing 

availability of hydrocarbon resources in the Arab countries. 

OAPEC members accounted for 90.9% of total energy consumption in 

the Arab countries in 2009 and other Arab countries for 9.1%.The growth 

rate of energy consumption in OAPEC members was 3.1%, close to that of 

other Arab countries (2.5%).

Figure 1-16 

Energy Consumption in the Arab Countries by Source, 2009 

(%) 

In terms of average per capita consumption of energy in the Arab 

countries in general, this average is still modest at about 11.3 barrels of oil 

equivalent (boe) in 2009 compared with 10.2 boe in 2005. 

This average hides significant disparities among Arab countries in the 

rates of per capita consumption of energy, as it reached to 16.2 boe in 

OAPEC member countries in 2009, compared with 2.8 boe among other 

Arab countries. 

This is due to differences in energy consumption within the Arab 

countries to a range of factors as follows: 

- The different levels of economic and social development, reflected in the 

varying degrees of the manufacturing process on the one hand, and on the 

well-being of Arab countries on the other. The GDP of OAPEC member 

countries accounted for about 84.6% of the Arab countries GDP in 2008. 

- The size of hydrocarbon resources in Arab countries is playing a crucial 

role in both economic and social development and the level of energy 

consumption. OAPEC member countries possessed 98% of the Arab 

countries crude oil reserves at the end of 2009 and 97.2% of their natural 

gas reserves at the end of 2009. 

Figure (1-17) and Table (1-19) show the per capita energy 

consumption of the Arab countries in 2009.

Figure 1-17 

Per Capita Energy Consumption in the Arab Countries, 2009 

(Boe/year) 

The Arab countries share of total world energy consumption in 

2008 was 5.5%, while that of the OECD countries was 48.8%, emerging 

economies 36.6%, and the FSU countries 9.1%, as shown in Figure 

(1-18). 

Figure 1-18 

Energy Consumption in Arab Countries and the World, 2008 

(%) 

1-2-1 Petroleum Products 

There was a slowdown in the growth rate of petroleum products’ 

consumption in the Arab countries in 2009, when it fell to 3.4%, compared

with 4.7% in 2008. The actual consumption of petroleum products in these 

countries in 2009 amounted to 5.6 million boe/d, compared with 5.4 million 

boe/d in 2008. Moreover, the share of petroleum products in total energy 

consumption in the Arab countries in the period 2005-2009 declined from 

53.7% in 2005 to 52.8% in 2009. 

The OAPEC members’ share of total petroleum products’ 

consumption in the Arab countries in 2009 was 86.4%, while that of other 

Arab countries was 13.6%. 

The relative breakdown of petroleum product consumption in the 

Arab countries in 2009 puts gasoil/diesel in first place with 33.1%, followed 

by gasoline with 20.2%, and fuel oil in third place with 19.9%. LPG came 

next with 8.1% of the total, followed by jet fuel with 4.7%, and lastly 

kerosene with 1.8%. 

Crude oil is still used directly as a fuel in power plants and refineries 

in several Arab countries, accounting for 9.3% of total petroleum products' 

consumption. Figure (1-19) shows the breakdown of petroleum product 

consumption in the Arab countries. 

Figure 1-19 

Breakdown of Petroleum Product Consumption in the Arab Countries, 2009 

(%) 

The Arab countries accounted for 7.4% of world oil consumption in 

2008, while the OECD countries took a 55.5% share, emerging economies 

32.3%, and FSU countries 4.8%, as shown in Figure (1-20).

Figure 1-20 

Oil Consumption in the Arab Countries and the World, 2008 

(%) 

1-2-2 Natural Gas 

Natural gas is the second biggest source in the energy mix of Arab 

countries. Owing to the huge efforts they have exerted to expand its use and 

increase their dependency on Natural Gas in meeting their energy needs. 

Arab countries consumption of natural gas in the period 2005-2009 rose by 

5.5%, this rate exceeds the growth rate of energy consumption for the same 

period. 

Natural gas consumption increased from 3.9 million boe/d in 2005 to 

4.8 million boe/d in 2009. This resulted in an increase of the share of 

natural gas in total energy consumption in the Arab countries from 44.4% 

in 2005 to 45.4% in 2009. 

Natural gas is only consumed in a significant way in five Arab 

countries, Saudi Arabia, the UAE, Egypt, Qatar, and Algeria. These five 

countries accounted for more than three quarters (75.6%) of the Arab 

countries total consumption of natural gas in 2009. 

OAPEC member countries accounted for 96.7% of the Arab countries 

total consumption of natural gas in 2009, as shown in Table (1-18). 

The Arab countries accounted for 10.5% of world natural gas 

consumption in 2008, while the OECD countries took a 49.7% share, the 

FSU countries 20.1%, and the emerging economies 19.7%, as shown in 

Figure (1-21).

Figure 1-21 

Natural Gas Consumption in the Arab Countries and the World, 2008 

1-2-3 Hydroelectricity 

The Arab countries have meagre resources of local water needed for 

building hydroelectricity facilities. This source therefore only makes a 

limited contribution to the Arab countries’ energy mix. There are limited 

capabilities for generating hydroelectricity in a small number of Arab 

countries, namely, Algeria, Egypt, Iraq, Lebanon, Morocco, Sudan, and 

Syria. Initial estimates show that the hydroelectricity production and 

consumption in these countries were at about 141,000 boe/d in 2009. The 

share of hydroelectricity in total Arab energy consumption reached 1.4% in 

2009. 

The Arab countries accounted for 1.5% of total world hydroelectricity 

consumption in 2008, while the emerging economies accounted for 50.8%, 

the OECD countries for 40.2%, and the FSU countries for 7.5%. 

1-2-4 Coal 

Coal resources are only found in a small number of Arab countries, 

namely, Algeria, Egypt, Lebanon, and Morocco. Even in these four 

countries, coal makes a limited contribution to the energy mix, with an 

estimated total consumption of about 47,000 boe/d in 2009, compared with 

31,000 boe/d in 2005. Its share of total energy consumption in the Arab 

countries increased from 0.35% in 2005 to 0.44% in 2009. 

The Arab countries accounted for 0.07% of world coal consumption in 

2008, while the emerging economies accounted for 59.1%, the OECD 

countries for 35.4%, and the FSU countries for 5.4%.

2. Total Energy Consumption in OAPEC Member Countries 

2-1 Total and Per Capita Energy Consumption 

Initial estimates indicate that energy consumption in OAPEC member 

countries in 2009 rose by 3.2% to about 9.6 million boe/d, although the 

annual rate of growth in 2005-2009 was 5.1%. Energy consumed in a 

significant way in three OAPEC member countries, namely Saudi Arabia, 

the UAE, and Egypt. 

There was a marked difference between OAPEC member countries in 

terms of energy consumption during the period 2005-2009. Three groups 

may be identified: 

1- Two members with a growth rate of over 6%, namely, Qatar (8%), and 

the UAE (7.6%). 

2- Six members with a growth rate of 4%-6%, namely, Syria (4%), Tunisia 

(4.1%), Algeria and Kuwait (5%), Saudi Arabia (5.4%), Libya (5.6%). 

3- Three members with a growth rate of less than 4%, namely, Iraq (1.6%), 

Egypt (2.5%) and Bahrain (3.8%). 

The rise in energy consumption in OAPEC member countries in 2009 

is estimated at 300,000 boe/d. It is mainly attributable to five countries: 

Saudi Arabia (100,000 boe/d), Algeria (45,000 boe/d), Egypt (35,000 

boe/d), Qatar (30,000 boe/d), and the UAE (21,000 boe/d). 

The increase in other member countries ranged between 8,000 boe/d 

in Iraq and 15,000 boe/d in Libya. Figure (1-22) and Table (1-20) compare 

OAPEC members’ energy consumption in 2005 with 2009. 

Saudi Arabia accounted for about 27.1% of total Arab energy 

consumption in 2009, followed by the UAE with 13.5%, Egypt with 12.7%, 

Algeria with 6.1%, Qatar and Kuwait with 6% each. The per capita rate of 

energy consumption in OAPEC member countries rose by 2.1% per annum 

in the period 2005-2009, from 14.6 boe in 2005 to 16.2 boe in 2009. 

This modest growth in per capita energy consumption resulted from 

the relatively high rate of population growth (2.4%) in 2005-2009, against 

an energy consumption growth rate of 3.2% in that period. The per capita 

energy consumption rate in OAPEC member countries ranged from 5.9 boe 

in Tunisia to 142 boe in Qatar. 

Figure (1-23) shows the per capita energy consumption of OAPEC 

member countries.

Figure 1-22 

Energy Consumption in OAPEC Member Countries, 2005 and 2009 

(Thousand boe/d) 

Figure 1-23 

Per Capita Energy Consumption in OAPEC Member Countries, 2009 

(boe) 

2-2 Energy Consumption by Source 

Petroleum products are the main source consumed to meet energy 

needs of OAPEC member countries. They maintained their top position in 

the energy mix, despite the decrease of their share in energy mix from 51% 

in 2005 to 50.3% in 2009. In contrast, the share of natural gas in member 

countries total energy consumption increased slightly from 47.5% in 2005

to 48.3% in 2009. The share of hydroelectricity dropped from 1.27% to 

1.11%, while that of coal increased from 0.22% to 0.35% in the same 

period. Figure (1-24) and Table (1-21) show energy consumption in 

OAPEC member countries in 2009 by source. 

Figure 1-24 

Energy Consumption in OAPEC Member Countries by Source, 2009 


2-2-1 Petroleum Products 

OAPEC members’ consumption of petroleum products is 

expected to increase by 3.4% to 4.8 million boe/d in 2009, compared with 

4.7 million boe/d in 2008. The average growth of petroleum products’ 

consumption had been 4.7% a year during the period 2005-2009. 

Five member countries recorded increases above the OAPEC average 

in 2005-2009: Qatar (19.1%), Algeria (7.9%), Bahrain (7.1%), Libya 

(6.9%), and Saudi Arabia (5.3%). 

The increase in petroleum products’ consumption in OAPEC member 

countries amounted to about 160,000 boe/d in 2009. It occurred mainly in 

six countries, namely, Saudi Arabia, Algeria, Egypt, the UAE, Qatar, and 

Libya. Petroleum products’ consumption rose by 55,000 boe/d in Saudi 

Arabia, by 35,000 boe/d in Algeria, 15,000 boe/d in Egypt, 12,000 in the 

UAE, and by 10,000 boe/d each in Qatar and Libya. The consumption 

increase in other member countries ranged between 2,000 boe/d in Tunisia 

and 8,000 boe/d in Kuwait, as shown in Table (1-22).

The relative importance of petroleum products in total energy 

consumption varies from one member country to another. In 2009, they met 

more than half of the energy requirements in six OAPEC countries, namely, 

Iraq, Syria, Tunisia, Kuwait, Saudi Arabia, and Libya. In Iraq petroleum 

products accounted for 81.6% of total energy consumption, in Syria 71.9%, 

in Tunisia 65.8%, in Saudi Arabia 60%, in Kuwait 64.8%, and 51.4% in 

Libya. In the remaining OAPEC countries the share of petroleum products 

ranged between 14.8% in Bahrain and 49.3% in Egypt. 

2-2-2 Natural Gas 

The consumption of natural gas in OAPEC member countries 

rose by 3.1% in 2009 to 4.6 million boe/d. The annual growth rate in 2005- 

2009 in OAPEC member countries was 5.5%, as shown in Figure (1-25) 

and Table (1-23). 

Figure 1-25 

Natural Gas Consumption in OAPEC Member Countries, 

2005 and 2009 


There is a noticeable disparity between member countries in terms of 

their reliance on natural gas. Three groups of countries may be identified: 

• Countries that depend heavily on natural gas to meet over 50% of their 

energy requirements. Three countries fall into this category: Qatar, 

Bahrain, and the UAE. The share of natural gas in total energy 

consumption in 2009 was 85.2% in Bahrain, 85.1% in Qatar, and 75.4% 

in the UAE.

• Countries that depend on natural gas to meet 33% to 50% of their energy 

needs. The six member countries in this group are Libya, Algeria, Egypt, 

Saudi Arabia, Kuwait, and Tunisia. The share of natural gas in the total 

energy consumption of these countries was 48.6% in Libya, 44.6% in 

Algeria, 43.3% in Egypt, 40% in Saudi Arabia, 35.2% in Kuwait, and 

34.1% in Tunisia. 

• Countries that rely moderately on natural gas, using it for less than 33% 

of their energy requirements. The two countries in this group, Syria and 

Iraq, rely on natural gas for 26.7% and 15%, respectively, of their total 

energy needs. 

Five member countries accounted for about 78.2% of the total natural 

gas consumption in OAPEC member countries in 2009. They are Saudi 

Arabia, the UAE, Egypt, Qatar, and Algeria. Their shares of the total 

OAPEC consumption of natural gas were 24.6% by Saudi Arabia, 23.3% by 

the UAE, 12.5% by Egypt, 11.5% by Qatar, and 6.3% by Algeria. Figure 

(1-26) shows the degree to which OAPEC member countries depend on 

natural gas to meet their energy requirements. 

Figure 1-26 

Natural Gas Consumption as a Percentage of Total Energy Consumption in 

OAPEC Member Countries, 2009 

(%) 

2-2-3 Hydroelectricity and Coal 

Hydroelectricity and coal consumption represented a tiny proportion 

of total energy in OAPEC member countries; they were no more than 

107,000 boe/d in 2009. Hydroelectricity share of total energy consumption 

in OAPEC member countries in 2009 did not exceed 1.1%. Just five

member countries use this energy source: Egypt, Iraq, Algeria, Syria, and 

Tunisia. Hydroelectricity consumption in these countries was ranging from 

0.1% in Tunisia to 5.9% in Egypt, as shown in Table (1-24). 

Consumption of coal in OAPEC countries was limited to two 

members: Egypt consumed about 20,100 boe/d, while Algeria consumed 

14,000 boe/d of coal. The share of coal in total OAPEC energy 

consumption did not exceed 0.4% in 2009, as shown in Table (1-25). 

3- Local Prices 

Eight Arab countries adjusted their local petroleum products' prices 

during the last few years. some of these countries resorted to the policy of a 

gradual increase in prices in order to easing the burden of subsidies, while 

others are deliberately raise the prices to achieve convergence between 

prices in local and international markets on the one hand, and the economic 

costs on the other. 

Tables (1-26) and (1-27) show domestic prices in OAPEC member 

countries in local currencies and US dollars in 2009.

PART ONE 

TABLES OF CHAPTER ONE 

DEVELOPMENTS IN GLOBAL MARKETS AND THEIR 

IMPACT ON OAPEC MEMBER COUNTRIES

Table 1-1 

Total & Annual changes in World Oil and NGLs Supply, 

2005 - 2009 

Total Supply 

(Million b/d) 

2005 2006 2007 2008 2009* 

OPEC 34.6 34.5 34.1 35.5 33.5 

Rest of the World 49.6 49.9 50.5 50.5 51.0 

World total 84.2 84.4 84.6 86.0 84.5 

Annual Change 

OPEC 1.3 (0.1) (0.4) 1.4 (2.0) 


World total 1.3 0.2 0.2 1.4 (1.5) 

Percentage Change (%) 

OPEC 3.9 (0.3) (1.2) 4.1 (5.6) 


World total 1.6 0.2 0.2 1.7 (1.7) 

* Preliminary data. 

Notes: 

- Parentheses denote negative figures. 

- OPEC's supply includes data from both Angola and Ecuador, which were admitted 

to OPEC as a full member at the beginning and the end of year 2007 respectively. 

Sources: 

- IEA, Oil Market Report (various issues). 

- OAPEC - Economics Department. 

- OPEC, Monthly Oil Market Report (various issues).

Table 1-2 

Growth in the World Economy and Oil Demand by Region, 

OECD countries 

2005-2009 

(%) 

2005 2006 2007 2008 2009* 

GDP 2.6 3.0 2.7 0.6 (3.4) 

Oil demand 0.8 (0.4) (0.8) (3.3) (4.0) 

Developing countries 

GDP 7.1 7.9 8.3 6.0 1.7 

Oil demand 3.6 4.1 4.6 4.0 1.8 

Countries in transition 

GDP 6.7 8.4 8.6 5.5 (6.7) 

Oil demand 2.1 0.0 2.1 0.0 (2.0) 

World total 

GDP 4.5 5.1 5.2 3.0 (1.1) 

Oil demand 1.8 1.2 1.3 (0.3) (1.6) 


Note: Parentheses denote negative figures. 

Sources: 


- IMF, World Economic Outlook (various issues) . 



Table 1-3 

World Economic Growth, 2005-2009 

(%) 

2005 2006 2007 2008 2009* 

OECD 2.6 3.0 2.7 0.6 (3.4) 

Of which: Euro Area 1.7 2.9 2.7 0.7 (3.9) 

Japan 1.9 2.0 2.3 (0.7) (5.3) 

Mexico 3.2 5.1 3.3 1.3 (7.3) 

South Korea 4.0 5.2 5.1 2.2 (1.0) 

USA 3.1 2.7 2.1 0.4 (2.5) 

Countries in transition** 6.7 8.4 8.6 5.5 (6.7) 

Of which: Eastern and 

Central Europe 

6.0 6.6 5.5 3.0 (5.0) 

Russia 6.4 7.7 8.1 5.6 (7.5) 

Developing countries 7.1 7.9 8.3 6.0 1.7 

Asia 9.0 9.8 10.6 7.6 6.2 

Of which: China 10.4 11.6 13.0 9.0 8.0 

India 9.2 9.8 9.4 7.3 5.6 

Indonesia 5.7 5.5 6.3 6.1 4.0 

Malaysia 5.3 5.8 6.2 4.6 (3.6) 

Pakistan 7.7 6.1 5.6 2.0 2.0 

Philippines 5.0 5.3 7.1 3.8 1.0 

Thailand 4.6 5.2 4.9 2.6 (3.5) 

Africa 5.7 6.1 6.3 5.2 1.7 

Latin America 4.7 5.7 5.7 4.2 (2.5) 

Of which: Argentina 9.2 8.5 8.7 6.8 (2.5) 

Brazil 3.2 4.0 5.7 5.1 (0.7) 

Venezuela 10.3 10.3 8.4 4.8 (2.0) 

World 4.5 5.1 5.2 3.0 (1.1) 


** Countries in transition are represented by CIS. 


Source: 

- IMF, World Economic Outlook, October 2009.

Table 1-4 

Total & Annual Change in World Oil Demand, 2005-2009 

(Million b/d) 

2005 2006 2007 2008 2009* 

World total demand 83.9 84.9 86.0 85.7 84.3 

Annual Change in 

World Oil Demand (Million b/d) 

1.5 1.0 1.1 (0.3) (1.4) 

Change (%) 1.8 1.2 1.3 (0.3) (1.6) 


Sources: 




Table 1-5 

World Oil Demand by Region, 2005-2009 

(Million b/d) 

2005 2006 2007 2008 2009* 

OECD countries 49.8 49.6 49.2 47.6 45.7 

Developing countries 29.3 30.5 31.9 33.2 33.8 

Countries in transition 4.8 4.8 4.9 4.9 4.8 

World total 83.9 84.9 86.0 85.7 84.3 


Sources: 




Table 1-6 

Total & Annual Change in Oil Demand in 

OECD Countries, 2005-2009 

(Million b/d) 

2005 2006 2007 2008 2009* 

North America 25.6 25.4 25.5 24.2 23.3 

Western Europe 15.6 15.7 15.3 15.3 14.8 

Pacific 8.6 8.5 8.4 8.1 7.6 

Total OECD 49.8 49.6 49.2 47.6 45.7 

Annual Change in 

demand 

0.4 (0.2) (0.4) (1.6) (1.9) 

Change (%) 0.8 (0.4) (0.8) (3.3) (4.0) 


Sources: 




Table 1-7 


Developing Countries, 2005-2009 

(Million b/d) 

2005 2006 2007 2008 2009* 

Arab countries 4.6 4.9 5.2 5.4 5.6 

Of which: Member countries 3.9 4.2 4.5 4.7 4.8 

Other Arab countries 0.7 0.7 0.7 0.7 0.8 

Other countries in the Middle 

East and Africa 

4.1 4.3 4.4 4.7 4.7 

Total Middle East and Africa 8.7 9.2 9.6 10.1 10.3 

Asian developing countries 15.4 16.0 16.8 17.3 17.7 

Of which: China 6.7 7.2 7.6 8.0 8.2 

India 2.6 2.6 3.0 3.1 3.2 

Other countries 6.1 6.4 6.2 6.2 6.3 

Latin America 5.2 5.3 5.5 5.8 5.8 

Of which: Brazil 2.2 2.2 2.3 2.5 2.5 

Other countries 3.0 3.1 3.2 3.3 3.3 

Total developing countries 29.3 30.5 31.9 33.2 33.8 

Annual Change in demand in 

developing countries 

1.0 1.2 1.4 1.3 0.6 

Change (%) 3.6 4.1 4.6 4.0 1.8 


Sources: 




Table 1-8 


Countries in Transition, 2005-2009 

(Million b/d) 

2005 2006 2007 2008 2009* 

Former Soviet Union 3.9 3.9 4.0 4.1 4.0 

Countries of Eastern Europe** 0.9 0.9 0.9 0.8 0.8 

Total countries in transition 4.8 4.8 4.9 4.9 4.8 

Annual Change in demand 

of countries in transition 

0.1 0.0 0.1 0.0 (0.1) 

Change (%) 2.1 0.0 2.1 0.0 (2.0) 


** Excluding countries that joined the OECD. 


Sources: 




Table 1-9 

Spot Price of OPEC Basket of Crudes, 2005-2009 

($/barrel) 

2005 2006 2007 2008 2009 

January 40.2 58.5 50.7 88.4 41.5 

February 41.7 56.6 54.5 90.6 41.4 

March 49.1 57.9 58.5 99.0 45.8 

April 49.6 64.4 63.6 105.2 50.2 

May 46.9 65.1 64.5 119.4 57.0 

June 52.0 64.6 66.9 128.3 68.4 

July 53.1 68.9 71.9 131.2 64.6 

August 57.8 68.8 68.7 112.4 71.4 

September 57.9 59.3 74.2 96.9 67.2 

October 54.6 55.0 79.3 69.2 72.7 

November 51.3 55.4 88.8 49.8 76.3 

December 53.1 57.9 87.1 38.6 74.0 

First quarter 43.7 57.7 54.6 92.7 42.9 

Second quarter 49.5 64.7 65.0 117.6 58.5 

Third quarter 56.3 65.7 71.6 113.5 67.7 

Fourth quarter 53.0 56.1 85.1 52.5 74.3 

Annual average 50.6 61.1 69.1 94.4 61.0 

Sources: 



Table 1-10 

Average Spot Prices of the OPEC Basket and Selected 

Arab Crudes, 2005-2009 

($/barrel) 

Crudes 2005 2006 2007 2008 2009 

The 

decrease in 

2009 

OPEC Basket 50.6 61.1 69.1 94.4 61.0 (33.4) 

Brent 54.4 65.1 72.5 97.0 61.6 (35.4) 

WTI 56.5 66.0 72.3 99.6 61.9 (37.7) 

Algeria - Saharan Blend 54.6 66.1 74.7 98.9 61.0 (37.9) 

Arabian Light 50.2 61.1 68.8 95.2 60.0 (35.2) 

UAE- Murban 54.1 66.1 72.9 99.0 62.4 (36.6) 

Kuwait - Export 48.7 58.9 66.4 91.2 59.4 (31.8) 

Libya - Es Sider 52.6 63.4 71.4 96.7 60.1 (36.6) 

Qatar-Marine 50.5 62.6 69.3 94.9 61.0 (33.9) 

Iraq-Basrah 48.3 58.0 66.4 92.1 59.1 (33.0) 

Sources: 



Table 1-11 

Nominal and Real Prices of Crude Oil, 1995-2009 

($/barrel) 

Nominal Price Index* 1995=100 Real 1995 Prices 

1995 16.9 100.0 16.9 

1996 20.3 101.9 19.9 

1997 18.7 103.6 18.0 

1998 12.3 105.0 11.7 

1999 17.5 105.9 16.5 

2000 27.6 107.5 25.7 

2001 23.1 109.5 21.1 

2002 24.3 111.3 21.8 

2003 28.2 113.3 24.9 

2004 36.0 115.6 31.1 

2005 50.6 118.0 42.9 

2006 61.0 120.6 50.6 

2007 69.1 123.4 56.0 

2008 94.4 125.8 75.0 

2009** 61.0 127.0 48.0 

* The index represents the GDP Deflator of industrial countries as published by the IMF. 

** Preliminary data. 

Sources: 

-IMF, International Financial Statistics Yearbook , September 2009. 



Table 1-12 

Average Monthly Market Spot Prices of Petroleum Products, 

2008-2009 

($/barrel) 

Market 

Unleaded 

Gasoline 

Gasoil* 

(0.2 % Sulfur) 

Fuel Oil** 

(3 % Sulfur) 

Average 2008 Singapore 102.6 123.7 76.0 

Rotterdam 98.3 125.3 78.9 

Mediterranean 111.5 125.3 77.5 

US Gulf 110.2 121.3 74.3 

Average 2009 Singapore 69.3 70.5 57.2 

Rotterdam 65.6 69.5 54.3 


US Gulf 72.9 67.2 57.6 

First quarter 2009 Singapore 54.8 57.4 40.0 

Rotterdam 49.4 59.3 36.2 


US Gulf 55.5 53.5 41.4 

Second quarter Singapore 67.6 67.4 53.5 

Rotterdam 65.6 63.5 48.9 


US Gulf 74.7 62.6 55.0 

Third quarter Singapore 74.4 73.8 63.7 

Rotterdam 73.5 74.1 62.9 


US Gulf 77.6 70.9 63.0 

Fourth quarter Singapore 80.5 83.3 71.5 

Rotterdam 73.7 80.9 69.3 


US Gulf 83.6 81.9 71.1 

* Singapore gasoil contains 0.5 % sulfur. 

** Rotterdam fuel oil contains 3.5 % sulfur. 

Source: 


Price 

without 

Tax 

Tax 

End- 

User 

Price 

Tax 

(%) 

 

Price 

without 

Tax 

Tax 

End- 

User 

Price 

Tax 

(%) 

Canada 0.64 0.30 0.95 31.92 0.46 0.26 0.72 36.06 

France 0.68 1.22 1.89 64.22 0.49 1.02 1.51 67.40 

Germany 0.67 1.29 1.96 65.73 0.45 1.07 1.53 70.33 

Italy 0.76 1.16 1.92 60.43 0.56 0.97 1.53 63.32 

Japan 0.73 0.69 1.42 48.74 0.76 0.64 1.40 45.85 

Spain 0.73 0.87 1.60 54.46 0.53 0.67 1.19 55.96 

United Kingdom 0.63 1.17 1.80 64.80 0.47 0.99 1.46 67.79 

USA 0.60 0.11 0.70 15.10 0.46 0.11 0.57 18.53 

Source: 

Table 1-13 

Share of Tax in Gasoline Prices in some Industrial Countries,2008-2009 

($/liter) 


November 2009 November 2008

Table 1-14 

Spot Tanker Freight Rates, 2008 - 2009 

(World scale) 

Arabian Gulf - 

East * 

Arabian Gulf - 

West ** 

Mediterranean - 

Mediterranean *** 

Average 2008 136 99 205 

January 2008 156 118 188 

February 126 90 144 

March 119 90 222 

April 128 91 265 

May 204 138 279 

June 201 139 237 

July 235 144 278 

August 92 89 181 

September 119 92 183 

October 105 86 162 

November 70 61 120 

December 77 54 204 

Average 2009 42 31 83 

January 2009 58 41 106 

February 47 39 88 

March 40 33 71 

April 30 22 62 

May 29 22 68 

June 46 33 111 

July 37 28 64 

August 38 27 67 

September 34 26 70 

October 42 29 84 

November 47 32 92 

December 57 38 113 

* Vessels of 230-280 dwt. 

** Vessels of 270-285 dwt. 

*** Vessels of 80-85 dwt. 

Source: 


Table 1-15 

OECD Oil Inventories at Quarter End, 2008 & 2009 

(million barrel) 

First quarter Second quarter Third quarter Fourth quarter 

2008 2009 2008 2009 2008 2009 2008 2009* 

North America 1215 1340 1240 1378 1278 1384 1301 1328 

Of which: USA 1015 1079 1002 1073 1006 1060 1009 1051 

Europe 964 1000 955 981 951 979 992 973 

Pacific 393 405 408 387 431 411 407 387 

Total OECD 2572 2745 2603 2746 2660 2774 2700 2688 

Rest of the World 1416 1369 1475 1407 1445 1429 1395 1438 

Other Inventories** 1027 1030 1017 1068 974 1046 1027 1089 

Total Commercial 5015 5144 5095 5221 5079 5249 5122 5215 

Strategic: 1656 1709 1667 1736 1669 1746 1683 1757 

US Strategic Petroleum Reserves 700 713 706 724 702 725 702 726 

Usable Commercial*** 1165 1294 1244 1370 1228 1398 1271 1364 

OECD Commercial (days supply) 54.0 62.0 56.0 62.0 56.0 60.7 58.0 58.0 

Total Commercial (days supply) 68.0 72.1 69.7 72.4 69.0 72.3 70.3 71.1 

OECD Strategic (days supply) 32 35 33 35 32 34.5 32 34 

Usable Commercial (days supply) 15.6 18.1 16.8 19.0 16.5 19.3 17.4 18.6 


** Oil At Sea and Independent storage. 

*** Stock holding over the above minimum operating needs (55 days). 

Sources: 

- OAPEC - Economics Department 

- EIG Inc., Oil Market Intelligence (various issues).

Table 1-16 

Value of Oil Exports in OAPEC Member Countries, 

2005-2009 

($ Million) 

2005 2006 2007 2008* 2009* 

Algeria 21029 25492 27757 38543 21497 

Bahrain 5066 5923 7106 5895 3275 

Egypt*** 1938 3214 3128 4911 2166 

Iraq 24058 31585 38056 63000 43895 

Kuwait 28234 36642 38488 57690 41858 

Libya 27518 34110 36944 52084 29446 

Qatar 13774 17685 18741 27428 16172 

Saudi Arabia 137050 162002 178284 247097 144249 

Syria 3672 5219 5644 7989 5414 

Tunisia ** ** ** ** ** 

UAE 43502 53222 56025 80635 44785 

Total 305841 375094 410173 585272 352757 


** Preliminary data indicate that oil consumption exceeds oil production. 

*** Official sources for 2007 & 2008. 

Sources: 



Table 1-17 

Value of OAPEC Oil Exports in Current and 

Real Prices, 1995-2009 

($ Billion) 

Year 

At Current Prices 

Expressed in 

Real 1995 Prices 

1995 93.7 93.7 

1996 108.7 106.9 

1997 110.0 106.2 

1998 76.8 73.1 

1999 109.7 103.6 

2000 177.2 164.8 

2001 148.6 135.7 

2002 142.0 127.6 

2003 159.5 140.8 

2004 219.0 189.4 

2005 305.8 259.2 

2006 375.1 311.0 

2007 410.2 332.4 

2008 585.3 465.3 

2009* 352.8 277.8 


Note: Real revenues are obtained by deflating current prices by the GDP Deflator 

of industrial countries as published by the IMF. 

Source: 

- OAPEC - Economics Department.

Table 1-18 

Energy Consumption in the Arab Countries, 2005-2009 


Petroleum products * 

2005 2006 2007 (1) 2008 (2) 2009 (2) 

Member countries 4018 4255 4457 4671 4831 

Other Arab countries 658 677 704 735 759 

Total Arab countries 4677 4932 5161 5406 5590 

Natural gas 




Hydroelectricity 




Coal 




Total Energy 




* Petroleum products include crude oil used in power plants. 

- (1) Preliminary data. 

- (2) Estimated data. 

Note : The total may not add up due to rounding. 

Sources: 

- Country papers presented to the Eighth Arab Energy Conference, Amman, Jordan 14 - 17 May, 2006. 

- Country papers presented to the ninth Arab Energy Conference, Doha, Qatar, 9 - 12 May, 2010. 

( Including the one received by 31/1/2010 only.) 


Table 1-19 

Per Capita Energy Consumption in the Arab Countries, 

2005 and 2009 

(Boe/year) 

2005 2009* 

Algeria 5.9 6.7 

Bahrain 108.1 92.9 

Egypt 6.2 6.5 

Iraq 7.2 6.8 

Kuwait 65.4 62.1 

Libya 23.2 25.5 

Qatar 189.8 142.0 

Saudi Arabia 36.6 41.2 

Syria 8.4 8.8 

Tunisia 5.2 5.9 

UAE 94.8 105.5 

OAPEC member countries 14.6 16.2 

Other Arab countries 2.7 2.8 

Total Arab countries 10.2 11.3 


Sources: 





Table 1-20 

Energy Consumption in OAPEC Member Countries, 

2005-2009 


2005 2006 2007 (1) 2008 (2) 2009 (2) 

Algeria 535 551 576 605 650 

Bahrain 263 273 277 292 305 

Egypt 1189 1198 1246 1303 1338 

Iraq 552 545 565 580 588 

Kuwait * 514 555 589 612 625 

Libya 422 456 490 510 525 

Qatar 462 507 546 594 629 

Saudi Arabia * 2320 2530 2650 2765 2865 

Syria 416 440 459 477 487 

Tunisia 142 150 157 163 167 

UAE 1066 1093 1146 1411 1432 

Total 7880 8298 8701 9312 9612 

* Including energy consumption in the oil industry . 




Sources: 





Table 1-21 

Energy Consumption in OAPEC Member Countries by Source, 

2005-2009 


2005 2006 2007 (1) 2008 (2) 2009 (2) 

Petroleum products* 4018 4255 4457 4671 4831 

Natural gas 3745 3919 4112 4501 4640 

Hydroelectricity 100 100 99 107 107 

Coal 17 23 34 34 34 

Total energy 7880 8298 8701 9312 9612 

* Including Oil consumption of the power plants in some OAPEC member countries. 




Sources: 





Table 1-22 

Petroleum Products' Consumption in OAPEC Member Countries, 

2005-2009 


2005 2006 2007 (1) 2008 (2) 2009 (2) 

Algeria 255 253 273 310 345 

Bahrain 34 37 37 42 45 

Egypt 584 605 625 645 660 

Iraq ** 451 440 460 475 480 

Kuwait * 344 365 384 397 405 

Libya 207 228 250 260 270 

Qatar 46 57 68 84 94 

Saudi Arabia * 1400 1540 1600 1665 1720 

Syria 305 320 331 345 350 

Tunisia 95 100 104 108 110 

UAE 298 311 326 340 352 

Total 4018 4255 4457 4671 4831 

* Figures include energy consumption of the oil sector and power plants. 

** Figures include energy consumption of the power plants. 




Sources: 





Table 1-23 

Natural Gas Consumption in OAPEC Member Countries, 

2005-2009 


2005 2006 2007 (1) 2008 (2) 2009 (2) 

Algeria 264 275 288 280 290 

Bahrain 229 236 240 250 260 

Egypt 531 520 530 560 580 

Iraq 81 85 85 85 88 

Kuwait 170 190 205 215 220 

Libya 215 228 240 250 255 

Qatar 415 450 480 510 535 

Saudi Arabia 920 990 1050 1100 1145 

Syria 104 113 120 125 130 

Tunisia 47 50 53 55 57 

UAE 769 782 820 1071 1080 

Total 3745 3919 4112 4501 4640 




Sources: 





Table 1-24 

Hydroelectricity Consumption in OAPEC Member Countries, 

2005-2009 


2005 2006 2007* 2008* 2009* 

Algeria 8.0 8.0 1.0 1.3 1.3 

Egypt 65.0 65.0 70.5 78.4 78.4 

Iraq 20.0 20.0 20.0 20.0 20.0 

Syria 7.1 7.1 7.1 7.1 7.1 

Tunisia 0.2 0.2 0.2 0.2 0.2 

Total 100.3 100.3 98.8 107.0 107.0 


Sources: 





Table 1-25 

Coal Consumption in OAPEC Member Countries, 

2005-2009 


2005 2006 2007* 2008* 2009* 

Algeria 8.4 15.1 13.8 13.4 14.0 

Egypt 8.6 8.2 20.1 20.1 20.1 

Total 17.0 23.3 33.9 33.5 34.1 


Sources: 





Table 1-26 

Domestic Prices of Petroleum Products in OAPEC 

Member Countries, 2009 

(Local currency/liter) 

Currency Gasoline Household Gas oil/ LPG 

Premium Regular Kerosene Diesel 

Algeria Dinar 22.6 21.2 - 13.7 9.0 

Bahrain Fils 100 80 25 70 100* 

Egypt Piaster 130 90 75 75 250** 

Iraq Dinar 50 40 5 10 200** 

Kuwait Fils 65 60 55 55 750** 

Libya Dirham 180 80 140 54.0 

Qatar Riyal 0.8 0.7 0.7 15 

Saudi Arabia Halala 60.0 - 43.4 37.1 67.4 

Syria Lira 48.0 - 22.7 18.0 240** 

Tunisia Millime 998 998 180 357 158 

UAE Dirham 1.78 1.52 2.51 2.11 

In 1995, Saudi Arabia significantly raised the domestic prices of regular gasoline (from 33 per liter to 

* Per kilogram. 

** Per cylinder. 

Sources: 




Table 1-27 

Domestic Prices of Petroleum Products in OAPEC 

Member Countries, 2009 

(Cents/liter) 

Gasoline Household Gasoil/ 

Premium Regular Kerosene Diesel 

Algeria 35 33 - 21 

Bahrain 27 21 7 19 

Egypt 24 16 14 14 

Kuwait 24 22 20 20 

Libya 14 14 

Qatar 22 19 19 

Saudi Arabia 16 - 12 18 

Syria 104 - 49 39 

Tunisia 81 81 15 29 

UAE 49 41 68 58 

In 1995, Saudi Arabia significantly raised the domestic prices of regular gasoline (from 33 halala 

Exchange rate in 2008. 

Source: 

- Derived from table (1 - 26).

PART ONE 

CHAPTER TWO & CHAPTER THREE

CHAPTER TWO 

ARAB AND WORLD DEVELOPMENTS IN 

THE EXPLO RATION, RESERVES AND PRODUCTION 

OF ENERGY RESOURCES 

I. OIL AND GAS 

1. Exploration and Production: An Overview 

A. Financial developments in support of exploration & development: 

In 2009, numerous changes took place on oil and gas prices, which 

had its impact on feasibility of new exploration activities both on regional 

and global levels. The sharp rise in prices witnessed in 2008, has directed 

exploration activities towards hard oil, exploration operations were driven 

to offshore, deep and ultra deep water. The falling of the prices later in 

2009, resulted in a decrease of the number of active rigs operating in 

worldwide, this interdependence can be justified by the economic factor 

that determines the feasibility of a region or a particular field in the face of 

rising or falling prices. Figure (A) illustrates the average change of the 

number of active rigs working worldwide in relation with mean annual oil 

prices since 1975 up to November 2009 (i.e. correlation of the number of 

active operating rigs with oil prices). 

Figure A 

Change in Average Number of Active Rigs Worldwide in Relation to the 

Variation of Oil Prices, 1975-2009

The size of petroleum companies’ budgets reflects the effectiveness of 

prospecting and exploration activities, and the interest in the search for new 

sources of oil and gas on the one hand, while such budgets-on the other 

hand- represent the extent to which the companies are affected with the 

market conditions. It is clear that the economic crisis that swept the world 

in 2008/2009 has influenced the budgets of many companies. Giant 

Chevron for example, has reduced its capital expenditure and exploration 

investment by 5% comparing to 2009, it has allocated $21.6 billion in 2010, 

of which $17.3 billion were earmarked for prospecting, exploration and 

production operations 1 . ConocoPhillips has earmarked $9.6 billion out of 

$11.2 billion for exploration and drilling activities in 2010, representing a 

decline of 10% in its 2009 budget 2 . Hess Oil Company, as well, raised its 

2010 budget up to $3.9 billion, of which $850 million were assigned for 

exploration activity, A survey carried by Barclays Capital, and was 

published by Reuters 3 , showed that global spending in the field of oil and 

gas exploration has confirmed an increase of 11%, bringing thus global 

spending from $391 million in 2009 up to $439 billion in 2010. The 

increase shown by the survey of 387 oil and gas producers follows the drop 

in spending of 15% in 2009 from the previous year, when oil prices reached 

a record high. 

Spending in the United States of America is expected to rise by 12% 

to $79 billion the analysts said. Canadian budgets will rise by 23% to $23 

billion. Outside North America, spending is expected to rise 10% to $337 

billion, largely driven by national oil companies, spending on exploration 

and production in the Middle East and Africa would rise by 15% from 2009 

levels. For the 2010 survey, companies were basing their spending 

projections on a U.S. crude oil price of $70.16 per barrel, up from the 

$50.18 level that they used for the previous survey that was issued in June 

2009. The average natural gas price for the 2010 budgets was $5.21 per 

thousand cubic feet, up from $4.68 in the middle of the year. About 45% of 

the companies surveyed expect to spend a greater share of their capital 

expenditures on exploration in 2010, Barclays said. 

B. Developments in the Arab Countries 

In 2009, some Arab countries have signed many agreements 

concerning prospecting, exploration and development, this reflects the 

growing interest in improving their petroleum resources. Thus for example: 

1 Oil and Gas Journal News Letter, 21/12/2009.  

2 Oil and Gas Journal, 2/12/2009.  

3 Reuters, Oil, Gas Companies to hike new project spending, Survey, 18/12/2009. 

ADNOC of the United Arab Emirates has signed an agreement with 

ConocoPhilips, the aim of which is to develop the national reservoirs of 

sour gas and condensates in Shah field, lying 180 km far west from Abu 

Dhabi. The major objective of the project aims at building one of the 

largest desulphurization unit in the world, in addition to the 

construction of a unit to process 1 billion scf of gas per day, which may 

feed around 540 million scf daily to the gas supply grid. The agreement 

includes the construction of a network to transport gas and liquid products, 

and constructing sulfur exporting facilities in Al Ruwais Industrial City. 

The project completion is expected to take place by 2014, or by the 

first quarter of 2015. ADNOC share in the new company (called Abu Dhabi 

Gas Development Company Ltd., which is the 16 th in ADNOC group of 

companies), is 60%, while 40% goes for ConocoPhilips. 

Abu Dhabi Gas Industries Ltd. (GASCO), has signed four contracts in 

connection with the Integrated Gas Development Project, which aims at 

connecting Abu Dhabi’s offshore gas fields to the onshore ones, within the 

frame work of Abu Dhabi’s strategic plan, to meet the rising demand on 

energy resources, the cost of the project may reach UAE Dhs 33 billion ($9 

million), all the facilities of the four contracts are projected to be completed 

by the 3 rd quarter of 2013. 

National Marine Company has won a contract from Zakum 

Development Company (ZADCO) to construct four artificial islands 

surrounding its north Zakum field, as a part of a multistage plan aims to 

increase the production capacity of the field from current rate of 500 

thousand b/d to 600 thousand b/d by late 2009, and to 750 thousand b/d by 

2015. ZADCO aims to use the islands to set drilling platforms and 

development infrastructure utilities, a process that will save 20% to 30% in 

cost compared to traditional methods, the company said. 

Abu Dhabi Marine Operating Company (ADMA-OPCO) has awarded 

a $402 million engineering procurement and construction (EPC) contract to 

National Petroleum Construction Company (NPCC). NPCC secured the 

contract on April 2 2009, after Abu Dhabi National Oil Company 

(ADNOC) and the Supreme Petroleum Council (SPC) gave their consent. 

The contract is a part of the integrated gas development project, where 

Habshan integrated gas project is considered as the first package of several 

onshore and offshore projects. ADMA-OPCO will produce gas by drilling 

more gas wells and building processing platform for gas dehydration and 

transfer to Das Island through the 46”, 38 kilometers main gas line to be 

laid through this contract. The work is planned to be completed by mid 

2012.

In Kingdom of Bahrain, a development and production sharing 

agreement has been signed between National Oil and Gas Authority, on one 

side and Occidental Petroleum Company, Emirati Mubadala Development 

Company, and the Oil and Gas Holding Company on the other side, the aim 

of which is to develop Bahrain Field production. This agreement marks the 

1 st step of its kind, since petroleum discovery in Bahrain 77 years ago. By 

laying the whole cost burden of development on Occidental Petroleum 

Company and its partner Mubadala, the two partners are obliged to 

maintain current production rates, then increase them according to the rates 

stated in the agreement. Oil and Gas Holding Company represents the 

Kingdom of Bahrain and holds 20% interest in the agreement. A joint 

operational company (Tatweer Petroleum-Bahrain Field Development Co.) 

was later formed, in the 20 years span covered by the development and 

production sharing agreement, the company needs to drill 3600 

development wells in order to double Bahrain’s petroleum production. 

In Tunisia, a permit was granted to the Canadian Storm Company, 

located in the southern governorate of Tataouine, this permit covers an 

area of 312 Km 2 . Financed by Storm Company for an amount of about $6 

million, the planning of the five-year works of the initial period aims to 

drill one exploration well at least. Moreover, Canadian Dualex Tunisia Inc. 

has signed the Bouhajla production sharing contract (PSC), to explore for 

oil in an area of 416km 2 in Kairouan Governorate. The initial term of the 

PSC is three years from the date of ratification, includes shooting seismic, 

and drilling one exploration well. The cost of this stage is estimated at 

about $4 million. PA Resources Company on the other hand, has declared 

that it has hooked up Daidoon 10, that is the fifth well to put on production, 

which is expected to level the fields production rate up to11- 14 thousand 

b/d by the start of 2010. Hasdurbal field, which contains 78 million BOE of 

reserves, has been put on production, it is expected to produce not less than 

1 billion cu m/year of gas, and around 150 thousand tons of condensates 

annually. 

In the People’s Democratic Republic of Algeria, Gazprom 

Netherlands BV, obtained rights for hydrocarbon exploration and 

production in El Assel onshore area, which is -according to preliminary 

studies- believed to hold 30 million tons of oil reserves (around 180 million 

barrel). The lease has three block covering an area of about 3 thousand km 2 . 

BP Algeria declared that it will invest about $2 billion, within the 

five coming years, to cover the cost of drilling three exploration wells in 

some prospected gas fields, capture and storage of CO 2 produced by 

some gas production operations, and on maintaining the production rates of

In Saleh&In Amnas fields which are under its current operations. Of these 

investments, about $800 million will be assigned to In Saleh compressors 

project to maintain a production rate of 9 billion cu m/year, and to a similar 

project in In Amnas field which produces at the same rate of In Saleh. 

Sonatrach, and the French G.D.F Suez have jointly started the 

development operation in Twat gas field which is located near Adrad City 

in south-western Algeria. The project which includes developing 10 fields 

in an area of 3thousand km 2 , and drilling 49 new wells, is scheduled to 

produce about 4.5 billion cu m of natural gas annually starting from 2013. 

The National Agency for Hydrocarbon Resources Valorization has 

approved the development plan after drilling 7 wells during an exploration 

campaign launched in 2003. 

In the Kingdom of Saudi Arabia, Saudi Aramco has awarded two 

contracts for the Karan gas field to UK-based Petrofac Ltd., and South 

Korea's Hyundai Engineering and Construction Co Ltd. Hyundai's turnkey 

contract covers Karan's facilities and provides for the construction of a unit 

to process and deliver the gas as well as back-up utilities for all the gasprocessing 

units. The turnkey contract awarded to Petrofac will cater 

mainly for engineering, procurements and construction for utilities and 

cogeneration at Karan and includes laying a 47-km-long pipeline, and 

building a power plant. Karan is the first non-associated offshore gas field 

to be developed by Saudi Aramco, the signature of the two contracts 

embodies Saudi Aramco's adherence to fulfilling the domestic market's 

need for gas. 

The first phase of the project is expected to supply 450 million cu 

m/day of gas by mid 2011. 

In the Syrian Arab Republic, General Petroleum Corporation and 

Total E&P SA, signed a service contract for Tabiyeh Gas Project in Deir al- 

Zour. The contract aims to increase the recovery of gas and Hydrocarbon 

liquids in Tabiyeh, Attallah north, and al-Qahhar fields, as well as 

increasing the quantities of clean gas transported to the consumers through 

the national gas network to its utmost limit on need. 

In addition to prepare improved reservoir studies for these fields, and 

applying the cutting edge technologies to enhance the production and 

improve the recovery factor. developing storing studies for these fields 

using the most modern techniques to enhance production. The investments 

required to execute the contract by Total are estimated at $150 million, to 

cover all operation and capital expenditures, along with non- refundable 

costs of training the personnel of General Petroleum Corporation, Syrian 

Gas Company and Syrian Petroleum Company.

On the other hand, Hayan oil and gas processing plant was officially 

inaugurated in Jihar field to the west of Palmyra. The plant has a capacity of 

6thousand b/d of oil and 650 thousand cu m/d of sales gas, and was built at 

a cost of €30million. It is worth mentioning that Hayan Petroleum 

Company is a 50/50 joint venture between the General Petroleum 

Corporation (GPC), which took over from the Syrian Petroleum Company 

(SPC), and INA Naftaplin of Croatia. 

In the Republic of Iraq, A deal has been finalized creating a joint 

venture between the Iraq Drilling Co. and the British Mesopotamia 

Petroleum Co. According to Iraq Drilling Co., the new venture (Iraq Oil 

Service Co.) will be responsible for drilling 60 wells a year at least. It will 

extend its service to both national and international companies operating in 

the country. 

Gulf Keystone Petroleum International Ltd., has as well signed two 

production-sharing contracts for two blocks in Iraqi Kurdistan region, 

aiming at drilling at least 1 exploration well in both Sheik Adi block which 

is located to the north east of Duhuk city (with an area of 180 km 2 ), and in 

Beer Bahr block lies to the north of same city (with an area of 350 km 2 ). 

The company believes that the two blocks hold about 1 billion barrel of 

stock tank of oil initially in place (STOIIP). 

The Iraqi ministry of Oil has signed an agreement with a consortium 

members of ExxonMobil as the lead contractor with 60% interest, Oil 

Exploration Company (owned by the Iraqi government) with 25% interest 

and Royal Dutch Shell with 15% interest, to redevelop and expand the West 

Qurna-1 field in southern Iraq. 

Both Exxon Mobil & Shell should spend $50 million on field 

development ($25 million as capital expenditures& $25 million as operation 

cost). By this contract, the Iraqi Government hopes to raise West Qurna 

field production from its current 500 thousand b/d to 2.325 million b/d 

within the next 6 years. 

BP, and China National Petroleum Corporation (CNPC), have signed 

a technical service contract with Iraqi Ministry of Oil to expand production 

from the Rumaila oil field, near Basra in southern Iraq 

The consortium led by BP with partners CNPC , and the Iraqi government's 

representative State Oil Marketing Organization, has agreed to nearly triple 

the Rumaila field's output from current 1 million b/d to 2.8 million bbl/day, 

BP and CNPC plan to invest approximately $15 billion in cash over the 20 

year lifetime of the contract with the intention of increasing plateau 

production in the second half of the next decade. Costs will start to be

ecovered, in terms of $2 fees per a barrel earned on the incremental oil 

production. Ministry of finance will charge 35% out of the fees as income 

tax, in addition to 25% as a share for the Iraqi partner. 

The agreement signed between the Iraqi Ministry of Oil, and the 

Italian Eni, Occidental of America and Korean Kugas, is another example 

of the agreements tied in Iraq, the aim of which is to develop the Zubair oil 

field, which currently produces about 195thousand b/day of oil, it states that 

these companies may charge $2 for every barrel of additional production, 

and should develop the field to increase the rate of production up to 1.125 

million b/day within in 7 years. 

The National Oil Corporation of Great Socialist People's Libyan Arab 

Jamahiriya (Libya), has signed a memorandum of understanding (MOU) 

with Total SA, aims at the modification of the already signed agreements on 

Mabrouk oil field and the offshore Al- Jurf oil field. In relevance with 

variations in oil prices, and other economic changes taking place during the 

period of 2006 – 2008, new sharing rates were considered on behalf of the 

Libyan side, besides introducing bonuses (i.e at signature and at the 

approval of natural gas utilization in the offshore137 block). 

In Egypt, block 4 was awarded to a consortium consisting of French 

Total and Italy's largest utility, Enel. The offshore block covers an area 

2516 km 2 , and lying in water depths from about 100m to 1600m, 70 km 

from the coast. The block has two previously drilled wells, as well as 

extensive 2D and 3D seismic surveys. The companies have agreed to drill 

one further well on top of shooting further seismic surveys during their four 

years exploration term. Total will hold a 90% operator stake in the license, 

while Enel will partner with the remaining 10%. 

A report of the Egyptian Ministry of Petroleum stated that the 

Egyptian General Petroleum Corporation, has succeeded during the last 

fiscal year (2007-2008) in marketing the natural gas production of offshore 

Abu Qeer via a sharing production contract, the national side of this activity 

has been offered a non-refundable signature bonus of $1.4 billion, marking 

thus the largest bonus ever gained by the Egyptian petroleum block, this in 

addition to about $1.8 billion spending on research and development. 

CPECC engineering company, a branch of Chinese CNPC, won a 

development contract in Sudan. The aim of this contract is to develop block 

6 in north of Sudan, where CPECC intends to spend $260 million to lay two 

flow lines, construct two storing tanks with 50 thousand cu m capacity 

each, and to carry other relevant works aiming at raising production of this 

block. Another agreement was signed to expand Khartoum’s refinery, in 

which Sudan and the company have equal shares.

This agreement is the second of its kind concerning this refinery, as 

the first expansion agreement was settled in 2006, with an aim to raise its 

capacity up to 5 million tons/y. It is worthwhile to add that this refinery has 

been constructed in 1997, with a capacity of 2.5 million tons/ year (around 

50 thousand b/d). 

Ministry of Oil&Gas in Sultanate of Oman, has signed a $50 million 

production sharing agreement with Epsilon Energy International, the aim of 

which is to explore block 55 (with a 756 km 2 area). 

Government of Oman has signed a concession agreement with 

Harvest Natural Resources Inc, a US headquartered international energy 

firm, for the exploration of gas in Block 64 with a 3478 km 2 area that 

straddles the boundaries of the Dakhiliya and Wusta regions. 

Harvest and Petroleum Development Oman will undertake an 

exploration program including seismic re-processing, drilling some 

exploration wells, and evaluating and developing any discoveries in the 

block. 

Within the Sultanate’s development plans, Chinese BGP company got 

a 400 km 2 , 3D Seismic survey contract in block 4, to evaluate the extension 

of the heavy oil reservoir of Saiwan structure, in which heavy oil was 

discover in 2009. 

Saiwan-2 East drilled in May 2009, was found to have a heavy oil 

formation with a gross thickness of 400 m .Whereas this well has produced 

at a rate of 280 b/d of light crude from another formation. 

In the Kingdom of Morocco, Island Oil & Gas Plc, through its wholly 

owned subsidiary Island International Exploration Morocco (IIEM), has 

signed with the Office National des Hydrocarbures et des Mines (The 

National Hydrocarbon&Mineral Office) a petroleum agreements for the 

contiguous areas of Foum Draa Offshore and Sidi Moussa Offshore, in 

Aghadeer Basin located in the Atlantic ocean. The contract was assigned in 

order to carry out seismic surveys and studies over 30 and 18 months period 

on these blocks respectively. 

C. Exploration in Deep Waters 

Deep water drilling may be taken as a rule of thumb in some areas of 

the world. Figure (B) for example, shows that most of the wells drilled, in 

the Gulf of Mexico, were in deep&very deep waters, 2870 meter deep.

Figure B 

Water Depth of Wells Drilled in the Gulf of Mexico 4 :1998-2008 

Globally, many states of the world, including some of the Arab 

countries, have shown a clear urge for hydrocarbon exploration in deep & 

very deep waters. The Libyan National Oil Corporation for example has 

declared that Exxon Mobil Exploration Co started drilling 1 st exploration 

well in deep waters (1472 meter) in the Block 20, located offshore Serti 

city; the total depth of the well may reach 4512 meters. 

In Arab Egyptian Republic, the British BP PLC company has 

analyzed some data, acquired from its exploration well ( Ruby – 3 to the 

west of the Nile Delta ), to assess the volume of natural gas reserves, the 

well was drilled in waters of 920 meters deep and at 66 km far from the 

Egyptian shores. 

The Statoil Hydro Company in Angola, under current BP operations, 

has declared its 17 th petroleum discovery Leda, at 5900 meters deep in the 

offshore block- 31 (2070 meters deep Angolan waters). BP Company as 

well, declared a drilling success in having a new exploration well which 

was considered as the 32 nd discovery in deep waters of not less than 1615 

meters, total depth of the well was3749 meters, tests suggested some 

5thousand b/d production capacity of the well. 

Figure (C), shows depth details of some drilled exploration wells in 

some Arab countries and others by 2009. 

4  Offshore magazine surveys volume: 69 issue 1, January, 2010. 

Figure C 

Water Depth of Some Offshore Exploration Wells Drilled in 2009 5 

D. Oil Discoveries in the Base rocks 

The year 2009 has witnessed an apparent move towards the 

exploration of non-traditional structures, Hurricane Exploration plc 

Company, for example, declared a pioneering petroleum hit in the crystal 

mantle at the offshore reef of Lancaster lease ( block 205/21a west of the 

Shetlands north-east of Britain. Hurricane Exploration plc confirmed that 

this find is a promising one, but needs more analysis and tests for the 

assessment of its capacity. The discovery was within the closure revealed 

by geological maps, oil reached to the surface at the beginning of the 

production test, however, bad weather and equipment malfunctioning 

forced the cease of the tests. Analysis showed that the discovered oil was 

light crude with 34 o -39.2 o API. 

Canadian CalValley Petroleum Inc in 2008, declared a new discovery 

in Yemen at the fractured Granite basement rocks of the mantle, through the 

well Qarn Qayma-2, the well was drilled to re-evaluate sand rocks of 

Kihailan Formation met before in Qarn Qayma -1 well which was drilled in 

block 9 of Seyon Mesilla basin in Hadramaut Valley. Despite those 

properties, tests of the aforementioned well were delayed for a lack of 

specialized equipments, this task been carried in 2009 and published within 

5 Energy Resources Monitor, OAPEC, Issues 1,2,3 and 4, 2009. 

the concerned company’s 3 rd quarter report of 2009. Testing Qarn Qayma - 

2, the well started to produce a mix of oil, condensate, gas and drilling mud, 

the company said it would move to test the other zones later in 2009, 

however, no more indications on such events were referred to in the 

mentioned report 6 . 

On the other side, the year 2009 marked the return of some countries 

like Afghanistan, to awaken its long time idleness in hydrocarbon 

explorations, posting thus three production-sharing exploration offers for 

block: Jangalikalan   Juma-Bashikurd   and Kashkari, where preliminary 

studies carried on those areas at the seventies of the 20 th century, have 

indicated some promising shows of gas in the first two blocks, and of oil in 

the third one. 

E. The 2009 Hydrocarbon Discoveries: 

Available information indicates that around 210 new discoveries have 

been made during the 2009, including 132 oil, and 78 natural gas ones. Of 

those achievements, the Arab world gained 126 discoveries. 83 of which are 

oil wise and 43 are natural gas discoveries. Egyptian Arab Republic has 40 

of the oil discoveries and 24 of the natural gas ones , whereas one oil and 3 

natural gas discoveries were registered in occupied Palestine (details will be 

shown later in this report). 

Of those important discoveries, the one been announced by Iran 

National Company (NIOC) at 2 nd quarter of 2009 stating that ONGC 

company of India reached a great oil exploration in Farsi block, facing the 

Iranian shores, geological reserves were estimated at more than 4.5 billion 

barrel of oil in Binaloud field. The Iranian oil minister declared a natural 

gas discovery with 170 billion cu m in the same field, considering it as the 

most important discovery within the last five years, he also mentioned that 

Susangerd field discovery ( south west of Khuzestan ) could hold as much 

as 8 billion barrel of oil reserves. 

Reliance Industries declared two discoveries of natural gas fields in 

India at: D-3 block in KG basin with reserves of around 269 billion cu m , 

and at D-9 block in the same basin with reserves of 306 billion cu m. It is 

worthwhile to add that Indian proved natural gas reserves are estimated at 

1067 billion cu m, it means that the magnitude of the new discoveries 

equals more than half of it, thus they may positioned India in the line of the 

world largest 15 natural gas producers. 

6 CalValley Petroleum Inc., Third Quarter Results, November 16 th , 2009. The report can be 

downloaded from the company website: http://www.calvalleypetroleum.com/operationshighlights.cfm. 

In Republic of Iraq, Gulf Keystone company (GKC), estimated the 

STOIIP of Shikan-1 discovery at 300-500 million barrel. The well at 

primary test produced 5thousand-8thousand b/d of oil (with 22 o API). 

(GKC) will continue drilling at that well targeting about 1.5 billion barrel in 

a deeper reservoir. 

Kuwait Oil Company (KOC), declared by late 2009, an oil & gas 

discovery in north-west of the country (Metrba field), with production 

capacity of about 8thousand0 b/d of light oil, and 3.1 million cu m of 

natural gas. (KOC) continues drilling evaluation wells to test some 

promising formations in the field. 

Dana Gas declared a discovery of natural gas at Salma- well (of 2231 

m depth), located in west Menzala block in Egypt’s Nile delta. Early 

assessment of the reserves may reach around 4.2 billion cu m, in addition 

to 3.7 cu m reserves discovered before in 2008 at the Nile delta. 

F. Non-conventional gas resources 

A growing interest in prospecting and exploration for nonconventional 

sources of gas like tight and semi-tight gas has been 

witnessed. 

Algeria had announced at the beginning of the second half of 2009, an 

invitation to submit bids to explore for hydrocarbons in 25 blocks, 

demonstrating its willingness to deal with companies that possess the 

necessary techniques in the field of exploration and production of nonconventional 

reservoirs such as tight sands, it stated that this point will be 

among the points to be taken into account in the qualification process of the 

bidding companies. 

Among the countries that have achieved significant discoveries in this 

regard, reference may be made to the United States that has achieved a 

discovery of gas in the Haynesville Shale rocks, with an estimated reserve 

of more than 566 billion cu m. 

As a result of development operations, the rate of production of these 

rocks reached 2.8 million cu m/d produced through 18 wells, average 

production of some of these wells scored more than 623 thousand cu m/d. 

Victoria Oil & Gas Plc achieved a discovery of gas in tight sands 

within the Logbaba project in Cameroon. It has announced that the well La- 

105 was drilled to a depth of 1838m, and encountered a gas- bearing zone 

27m thick.

In Germany, Exxon Mobile Corp. acquired the right of prospecting for 

coal-bed methane (CBM), within an area of more than 8thousand km 2 . The 

company said that the excavation work will begin in 2010. 

New Zealand also reported that its gas reserves could double if 

the development of discovered fields containing methane hydrate continues, 

but bringing these fields to commercial production needs a long period 

(10-25 years), while the initial investments may exceed $ 8.5 billion. 

In South Africa, Falcon Oil&Gas Ltd. has signed a one year 

agreement, aimed to assess the gas reserves in the sandstone, and in the 

fractured shale (shale gas) belonging to the Permian period, in an area of 

more than 30 thousand km 2 , in the Karoo Basin located 300 km northeast of 

Cape Town. 9 wells have been drilled in the mentioned area in the early 

seventies of the last century, one of which produced from fractured shale at 

a rate of more than 52thousand cu m/d without the need to stimulate the 

Well. 

Talisman Energy 7 has estimated the geological reserves of nontraditional 

gas within its operation area in North America, at more than 3.7 

trillion cu m, of which 1 trillion cu m are recoverable reserves. The CEO of 

the company assured that producing this type of gas will be economically 

feasible for Talisman Energy at a gas price of $4/1000 ft 3 . Dutch Shell Plc 

estimated its North American non-conventional gas reserves at more than 

14 trillion cu m, while the world estimations of technically recoverable 

reserves 8 of non-conventional gas ranges between 85 to 283 trillion cu m 

according to the company’s estimates at the beginning of the second half of 

2009. 

G. Development in oil and gas production 

Several new fields were put on production during 2009, in Tunisia for 

example, Daidoon-10 well was hooked up at the rise of the 2 nd half of 2009. 

This 5 th offshore well, is estimated to raise the production of Daidoon field 

to a rate of 11thousand-14thousand b/d. Whereas Hasdurbal field (with 

reserves ranging up to 78 million BOE) was put on production, and is 

expected to produce 1 billion cu m per year of gas and 150 thousand tons of 

condensate annually. 

The giant Khurais field of Saudi Arabia was put on production, it is 

considered as the largest addition to Saudi output with a capacity of 

1.2 million b/d, 8.9 million cu m/d of sour gas and 70 thousand b/d of 

condensates. Comparing to global oil demand, this field will supply around 

1.5% of it, it is expected to produce for the up to 25 years. 

7 Reuters, Wed 20/5/2009.  

8 Bloomberg Press, 9/6/2009. 

The ministry of Oil and Mineral Resources in Syrian Arab Republic, 

announced that Syrian Gas Company- in coordination with Syrian 

Petroleum Company - started the production of natural gas from Abu Rabah 

field, which is one of the largest gas fields in Syrian Arab Republic, Syrian 

Gas Company, started to supply the national gas network with around 

1.5 million cu m/d, may be raised up to 2 million cu m/d, in addition to 

1thousand b/d of condensates transported by special tanks. 

Dana Gas, started producing gas and condensate in Egypt, in the 

2 nd quarter of 2009, from Elbesent field located in west Menzala Block in 

the Nile delta. 

In Oman, Ras Al-Khaima Petroleum Company, started oil production 

in Bukha West field (in block 8 of Hermes Strait), from two offshore wells 

of 90 meters water depth, 25 km far from Mesendem Island. Initial 

production rates touched upon 10 thousand b/d, with 42 o API oil, in 

addition to 850 thousand cu m/d of associated gas. Bukha West field was 

discovered in 1976 and was regarded as gas field, it has been abandoned 

because of lack of commercial production. 

However, Ras Al- Khaimah has -between 2006 and 2008- drilled 

several appraisal wells including extended horizontal sections, to reveal the 

presence of large volumes of oil in Musharraf, Moudud, and Thumaamah 

reservoirs. 

In Brazil, the offshore Frade field facing Brazil’s shores, was put on 

production at a rate of about 30 thousand boe/d, with an outlook to be raised 

up to 90 thousand boe/d by the year 2011. An offshore platform, 280 km 

from Rio de Janeiro shores, started to receive the production from the giant 

Tupi oil field. Some resources mentioned that the production rate will not 

exceed 14 thousand b/d during the 15 months test period. 

In the United States of America, Chevron started the oil production 

from the Tahiti field located in ultra deep water (more than 1250 m). This 

field is considered as the deepest field in the Gulf of Mexico, where the 

producing formation is laid at a depth of more than 8100m. Plans are 

undertaken by the company to bring the production rate to 125thousand b/d, 

in addition to about 2 million cu m/d of gas. Recoverable reserves from this 

field are believed to be 400-500 million barrel of oil equivalent. 

H. Application of Improved Oil RecoveryTechniques: 

IOR techniques have gained an increasing interest of Petroleum 

Industries all over the world, for its increasing all in all the Recovery Factor 

(RF) of petroleum fields. Some Arab countries have adopted different

techniques of IOR, in Bahrain for example, the gas injection has been 

applied to maintain formation pressures, and decreasing the water cut. 

Occidental Oil Company, has a development contract with Bahrain for 

Al-Awali field, according to which IOR techniques will be applied to 

double the oil field production, as it declared in 2009. 

ADCO of the UAE signed a contract with General Electric and ABB 

to supply both gas compressors and H 2 S separators, enabling thus its 

injection in Asab & Sahel fields, within the framework of IOR technology. 

Saudi Arabian Chevron initiated steam injection in its large-scale pilot 

steamflood project at Wafra field, an Eocene heavy-oil carbonate reservoir 

in the Partitioned Neutral Zone (PNZ) between Kuwait and Saudi Arabia. 

The $340 million pilot is the final test phase for steamflooding the 

reservoir, and it is expects to lead to full-field steamflooding, which would 

make the project the world's first commercial conventional steamflood in a 

carbonate reservoir. Full-field deployment of steamflood technology in the 

PNZ would significantly increase recovery of crude oil reserves, confirm 

the technology’s potential applicability in other carbonate oil fields. 

The large-scale pilot is the third in a series of staged tests for 

validating the feasibility of steamflooding at Wafra, it is planned to last 3 

years. 16 injection wells, 25 producers and 16 monitoring wells are 

operated, water processing and steam generation and distribution facilities 

were employed. Previous tests included the small-scale test completed in 

2008 and simple steam stimulation in the late 1990s. 

In Saudi Arabia on the other hand, ARAMCO's vice president for 

exploration and production affairs 9 , declared that the company will apply 

Enhanced Oil Recovery techniques to increase the recovery factor from 

current 50% up to around 70% over the coming two decades. With 

reference to most optimistic scenarios, he added that the future global 

demand on oil will reach 125 million b/d, this requires more efforts to 

produce additional 15-40 million b/d, to meet demand growth on the one 

hand, and to compensate for declining production from some of the old 

fields, on the other hand. 

Moreover, Saudi Arabia has launched its 1 st injection station at 

Khurais oil field by mid 2009, where some booster pumps will transport sea 

water at Qraia treatment station to Ain Dar, via a 56 inch pipeline. From 

Ain Dar, other supporting pumps will transport water across Qraia–Khurais 

pipeline of 60 inches diameter. This project is one of five similar projects 

aiming at the injection of 2.1 million b/d of treated sea water in Khurais, 

Abu Jaifan, and Mazaleej fields. 

9 Oil and Gas Journal, 5/5/2009 

In Iraq, the Ministry of Oil, tied a contract with an international 

company to finalize a water injection project at west Qurna field, the 

estimated cost of the project amounts to about €63 million. By the end of 

March 2009, around 60 % of this project was done. In 2 nd half of 2009, 

The Board of Directors of Petroleum Development Oman (PDO) has 

endorsed an extensive project aiming at the development of Amal west and 

Amal east fields, by adopting steam injection technique, enabling Amal 

fields to be the 4 th IOR project of PDO, other projects include polymer 

injection in Marmool field, gas injection in Herwell field and steam 

injection in Qarn Alam field. Amal field has been producing by traditional 

methods since 1984, the nature of existing heavy oil in this field hinders all 

these traditional procedures to reach appropriate production rates or 

attaining an accepted recovery factor. PDO, emphasized that using steam 

would allow oil production rates of up to three folds the current rates, steam 

flooding and steam recycling will be applied in Amal west and Amal east 

respectively. 

Petroleum Development Oman's steam injection tests; have been 

conducted in Amal field since 2007, to support the overall development of 

the field. The plan included –as well- drilling 300 new wells within a 14 

years period. The company plans to complete the hot oil reception facilities 

by the end of 2012, while one steam generating facility will be used for 

both fields (Amal east and Amal west). It also plans to take advantage of 

the ambient heat generated from gas turbines at the power station to reduce 

the quantities of gas that must be burned to generate steam. 

Internationally speaking, Ghana for example, has officially approved 

the 1 st stage of the giant Jubilee field development, it is estimated that this 

field contains a recoverable reserves of not less than 800 million barrel. The 

field is expected to be put on production by the 2 nd half of 2010, average 

production rate is expected to reach around 120 thousand b/d, and may be 

doubled to 240 thousand b/d by 2013, 230 thousand b/d of water will be 

injected in the field. 

Another example is the start of oil production from the offshore 

Mafumeira Norte field, located about 24 kilometers off the coast of Angola. 

The field was put on production three months ahead of schedule, the move 

came as the first phase to develop the field in question, in which 14 wells 

were drilled, and water flooding technique was adopted to maintain 

formation pressure. Average production rate is expected to reach 30 

thousand b/d, in addition to 30 million scf / d of gas by 2011. Major oil 

exploration and production developments in the Arab countries and the 

word are summarized below:

1-1 Seismic Surveys 

The number of crews working on seismic surveys worldwide in 2009 

rose by 2%, reaching an average of 363 crew/month, comparing to 356 

crew/month in 2008,as shown in Figure (2-1) and Table (2-1). 

Figure 2-1 

Seismic Surveying Activity in Different Parts of the World, 2005-2009 

(crew/month) 

The Middle East was on the lead of the growth as the number of crews 

there soared by 17% to reach 34 crew/month, compared with an average of 

29 crew/month in 2008. The Far East came second with an increase of 15% 

over 2008. Africa and Latin America have both increased their own crews 

by 14% and 9% respectively. 

In Europe, the average number of working crews remained the same 

compared to 2008, while the average number of working crews dropped by 

4% in the Commonwealth of Independent States, and by 10% in the United 

States of America compared with 2008. In Canada, the average dropped by 

59% scoring 7 crew/month in 2008. The above said figures represent the 

average number of working crew within the period from January to October 

2009. 

1-2 Exploration and Development Drilling 

The number of rigs operating in various regions of the world decline 

from 3336 rigs in 2008 to 2278 rigs in 2009, i.e. a decrease of around 32%. 

The number of operating rigs in Canada, dropped by 46% from 379 rigs in 

2008, to 206 rigs in 2009. The number fell in the United States of America 

from 1878 rigs in 2008, to 1075 rigs in 2009.

A drop by 14% was witnessed in Europe from 98 rigs in 2008 to 84 

rigs in 2009. In the Middle East, the average fell by 10% from 280 rigs in 

2008 to 252 rigs in 2009. 

The Number of operating rigs in Latin America, Africa and 

Asia/Pacific, declined by 7%, 5%, and 4% respectively, as it is shown in 

Figures (2-2), (2-3) and Table (2-2). 

Figure 2-2 

Active Drilling Rigs Worldwide, 2004-2009 

(Rigs) 

Figure 2-3 

Distribution of Active Drilling Rigs Worldwide,2009 

(%)

As it is previously mentioned, the exploration activities and related 

drillings ones have hit 210, and 78 new oil and gas findings respectively. Of 

those wins, 126 in the Arab countries ( 83 oil and 43 gas ones) where the 

contributions of Egypt was 40 findings of oil and 24 of gas, Algeria 

recorded 8 oil and 8 gas discoveries. More discoveries were hit with 5 oil 

and 5 gas finds in Saudi Arabia, 6 oil finds in Libya and some new 

discoveries were achieved in Syria, Iraq, Kuwait and Tunisia. Moreover, 

3 gas and 1 oil discoveries were recorded in Occupied Palestine. Figures 

(2-4), (2-5) and Table (2-3). 

Figure 2-4 

Oil Discovers in OAPEC Member Countries and Other Arab Countries, 

2005-2009 

Figure 2-5 

Gas Discoveries in OAPEC Member Countries and Other Arab Countries, 

2005-2009

2. Oil and Natural Gas Reserves 

Estimates indicate a rise in oil and natural gas reserves in 2009, 

nevertheless, such estimates declined in some countries. 

2-1 Oil Reserves 

World oil reserves rose slightly by 0.1% from 1177.8 billion barrel in 

2008, to 1178.9 in 2009, these figures exclude non-conventional sources 

such as tar sand and shale oil in Canada with 168 and 175 billion barrel 

estimated by 2008 and 2009 respectively, and don't take into consideration 

the bitumen and very heavy oils of Orinoco Belt in Venezuela estimated at 

more than 94 billion barrel. 

2-1-1 OAPEC Members and Other Arab Countries 

A marginal increase of 0.03% in OAPEC‘s members proven reserves 

from 667.23 billion barrel in 2008 to 667.44 billion barrel in 2009, which 

mainly came from Egypt who declared an increase of 5% of its reserves 

from 4.19 billion barrel in 2008, to 4.4 billion barrel in 2009, after 

recording 40 new discoveries as it was previously stated. 

The Arab states reserves estimated at 680.94 billion barrel in 2009, 

accounted for 57.8% of total world proven oil reserves, and OAPEC 

members accounted for 56.6% of the world total, which represents a decline 

of 0.6% of its participation to the world reserves over 2008 and 2009. 

It must be stated that such a decline doesn't necessarily reflect a 

reserves drop; it rather can be attributed to the increase of oil reserves in 

other states. 

Figure (2-6), shows the contribution rate of OAPEC members and 

other international groups in global oil reserves by 2009 end, while Figure 

(2-7) shows OAPEC members' proven reserves evolution between 2008 and 

2009.

Figure 2-6 

World Oil Reserves by International Grouping, End 2009 

Billion barrel 

Figure 2-7 

The Evolution of Oil Reserves in OAPEC and OPEC Member Countries, 

2005-2009 

(Billion barrel at year end) 

2-1-2 International Groups and other States 

Oil estimates rose in many states like Brazil, where reserves were 

estimated at 12.80 billion barrel in 2009, with a marginal rise of 1.4% 

comparing to 2008 estimates that reached 12.62 billion barrel. China

eserves were estimated at 20.35 billion barrel, showing an increase of 25% 

from the 2008 reserves estimated at 16.30 billion barrel. On the other hand, 

new estimates have shown a decline in UK’s proven reserves from 3.41 to 

3.08 billion barrel between 2008 and 2009 respectively, more decline was 

witnessed in the United States of America, Canada, and Mexico, by 10.3%, 

0.9%, and 1.6 % respectively. Table (2-4). 

2-2 Natural Gas Reserves 

Estimates for global natural gas reserves in 2009, touched upon 187 

trillion cu m, indicating an increase of about 4.4 % in 2008 estimates that 

mounted to 179 trillion cu m, most of this increase came mainly from South 

Yolotan Field of Turkmenistan, which was discovered in 2006. China’s 

new natural gas reserves contributed much in this regard as an outcome of 

Chinas' urge to utilize its natural gas sources and as a result of its efforts to 

find more gas discoveries, at the commencement of 2009, China confirmed 

that Liwan Field may contain 113-170 billion cu m of reserves. Canada & 

the United States of America’s reserves have shown an apparent increase 

(as it will be illustrated later in this chapter), Figure (2-8) and Table (2-5). 

Figure 2-8 

World Natural Gas Reserves, End 2009 

(%) 

2-2-1 OAPEC Members and other Arab Countries 

By the end of 2009, no worthwhile change has been observed in 

the 2008 natural gas reserves of the member countries, i.e. about 

52.59 trillion cu m. It must be mentioned that the Egyptian Arab Republic

amends its reserves and production figures by the end of fiscal year (midcalendar 

year), such amended figures are usually included in the secretary 

general report at the beginning of the following year, the Egyptian 

Arab Republic amended published estimates of natural gas reserves, 

showed an increase from 2024 billion cu m of 2008, to 2128 billion cu m in 

2009. 

OAPEC members’ natural gas reserves represented 28.1% of total 

world reserves, down from 29.3% in 2008, while the Arab states together 

accounted for about 28.9% of world reserves at the end of 2009, comparing 

to 30.2% in 2008. Such figures don’t reflect a real decrease in reserves; they 

rather are due to the corresponding increase of total world natural gas 

reserves. 

Figure (2-9) shows mainly the real evolution of natural gas reserves at 

member countries and OPEC ones as well in the period 2005 – 2009. 

Figure 2-9 

The Evolution of Natural Gas Reserves in OAPEC and OPEC 

Member Countries, 2005-2009 

(Billion cubic meter at year end) 

2-2-2 International Groups and other States 

Natural gas estimates of the Commonwealth of Independent States 

rose from 56.4 trillion cu m in 2008 up to 61.3 trillion cu m in 2009,

showing an increase of about 8.6%, attributed mainly to Turkmenistan’s 

reserves, and may be regarded as 33% of total natural gas reserves of the 

world. China’s natural gas reserves have gone up by 33.8% from 2265 

billion cu m in 2008, to 3030 billion cu m in 2009. 

On the other hand, the United States of America’s estimates have 

shown an increase of about 2.9% from 6.7 trillion cu m in 2008 to 6.9 

trillion cu m in 2009, Canada’s estimates increased by 114 billion cu m 

from 1.64 trillion cu m in 2008 to 1.76 trillion cu m in 2009. 

Whereas UK’s reserves, declined by 15% from 343 billion cu m 

in 2008, to 292 billion cu m in 2009. Moreover, Mexico estimates fell 

down by 3.5% to touch on 360 billion cu m in 2009, comparing to 373 

billion cu m in 2008. 

3. Hydrocarbon Liquids and Natural Gas Production 

3-1 Hydrocarbon Liquids Production 

Oil production covers both crude oil and condensates production, 

while hydrocarbon liquids production covers crude oil, condensates and 

natural gas liquids (NGLs) as well. 

3-1-1 Oil Production 

Oil production decreased significantly at the global level, it goes 

without saying that the financial crisis the world has witnessed during 

2008/2009 played a significant role in reducing the demand on the one 

hand, and lowering oil prices on the other. 

It is estimated that the average oil production in the world 

amounted to about 70.5 million b/d, compared with more than 85 million 

b/d in 2008. 

Natural gas liquids production was estimated at about 9.4 million b/d 

in 2009, bringing total estimated production of hydrocarbon liquids in that 

year to about 80 million b/d, down 15% from the estimates in 2008 which 

amounted to about 94 million b/d. Figure (2-10) and Table (2-6).

Figure 2-10 

World Oil Production by International Gruoping, 2009 

Million/bd 

3-1-1-1 OAPEC Members and Other Arab Countries 

The available data indicate that oil production in member countries 

fell by 6.1%, from 21.35 million b/d in 2008 to 20.05 million b/d in 2009, it 

seems that the reduction in production- quotas by the Organization of 

Petroleum Exporting Countries OPEC, contributed to the reduction in 

production rate of the member countries, especially since there are seven 

countries involved under the umbrella of OPEC in addition to membership 

in the Organization of Arab Petroleum Exporting Countries. 

For example, estimates show that the average production of the United 

Arab Emirates declined from 2.63 million b/d in 2008, to 2.27 million b/d 

in 2009, and the average production of Saudi Arabia declined by 4% from 

8.53 million b/d in 2008, to about 8.2 million b/d in 2009. The average 

production of the State of Kuwait dropped by 15.6% to 2.26 million b/d in 

2009, down from 2.68 million b/d in 2008. 

On the other hand, some member countries have witnessed a rise in 

the average production rate, Iraq's production was increased to 2.4 million 

b/d in 2009, compared to 2.28 million b/d in 2008, this reflects an increase 

equivalent to more than 5%. 

Non members Arab states worked some different rates of production, 

it is estimated that the average production in Sudan has risen by 8.1%

from 462.4 thousand b/d in 2008, to 500 thousand b/d in 2009. Official data 

show that oil production in the Sultanate of Oman dropped by 5.4% 

from 748.3 thousand b/d in 2008, to 708 thousand b/d in 2009. The average 

annual production rate of oil in Yemen declined by 3.2%, from 293.5 

thousand b/d in 2008, to about 284 thousand b/d in 2009. 

Thus, the average rate of hydrocarbon liquids production in OAPEC 

members have really changed from 25.3 % in 2008 to around 28.2 % by 

2009, whereas Arab states collectively contributed about 30.2 % of global 

production in 2009 compared to 27% in 2008. Figures (2-10),(2-11) and 

Table (2-6). 

Figure 2-11 

Oil Production Rates in OAPEC and OPEC Member Countries, 2005-2009 

(Million b/d) 

3-1-1-2 International Groups and other states 

Estimates of oil production in the non-Arab OPEC countries 

decreased from 12.45 million b/d in 2008 to about 10.8 million b/d in 2009, 

thus, total production of OPEC Arab and non-Arab has countries dropped 

from about 32.5 million b/d in 2008 to about 29.6 million b/d in 2009, this 

reflects a 9% decrease of oil output. Moreover, estimates of production 

witnessed a decline in Mexico of more than 200 thousand b/d from 2.8 

million b/d in 2008, to 2.6 million b/d in 2009. 

Despite lower average production of Kazakhstan with almost 55 

thousand b/d in 2009 comparing to an average of 1.39 million b/d in 2008, 

but the high rate of production in Azerbaijan of about 86 thousand b/d, and 

higher Russian's production by more than 146 thousand b/d, contributed to 

higher average production of the Commonwealth of Independent States by

about 2%, from 12.4 million b/d in 2008, to around 12.7 million b/d in 

2009. 

Production rates increased in the United States of America from 4.9 

million b/d in 2008 to more than 5.3 million b/d in 2009. Recorded 

estimates of production in Canada, increased by about 17% from 2.2 

million b/d in 2008, to more than 2.5 million b/d in 2009, including the 

production of non-conventional oils. 

3-1-2 NGL Production in OAPEC Members and the World 

Global production of natural gas liquids slumped by 1 % in 2008 from 

9.38 million b/d in 2007 to 9.35 million b/d in 2008. Member countries' 

production had its variation as well, UAE production, for example, 

witnessed a decline of 16.7 %, from 300 thousands b/d to 250 thousands b/d 

between 2007 and 2008 respectively. Algeria’s production, on the other 

hand, went up from 342 thousands b/d to 357 thousands b/d in the same 

period. 

In the same time, production estimates increased in the State of Qatar 

by 7.1% from 326 thousand b/d in 2007, to 349 thousand b/d in 2008, and 

the average production in the Libyan Arab Jamahiriya increased by 9.6% 

from 73 thousand b/d in 2007 to 80 thousand. b/d in 2008. 

Overall, the average production of natural gas liquids in member 

countries leveled down by 0.3% from 2.64 million b/d in 2007, to 2.63 

million b/d in 2008. In Oman, the average natural gas liquids production 

improved from 61 thousand b/d in 2007, to 88 thousand b/d in 2008, while 

the average production of natural gas liquids in the Republic of Yemen in 

2008 remained unchanged from 2007 levels at about 10 thousand b/d. 

Thus, the contribution of member countries in the world's production 

of natural gas liquids increased from 28.1% in 2008 to 28.3% in 2009, and 

the contribution of all the Arab countries leveled up to 29.3%, from about 

28.9% in 2007. (Table 2-7). 

3-2 Marketed Natural Gas 

The quantities of natural gas marketed worldwide increased by 4.2 % 

in 2008, from 2942 billion cu m in 2007, to 3065 billion cu m in 2008. 

Figure (2-12) and Table (2-8).

Figure 2-12 

Marketed Natural Gas by International Grouping, 2008 

(%) 

3-2-1 OAPEC Members and other Arab countries 

Marketed natural gas of OAPEC members rose from 377.7 billion cu 

m in 2007 up to 405.5 billion cu m in 2009 indicating rises in: 

Bahrain (13.6 %), Algeria (2%), KSA (8.1%), Iraq (28.8%), Qatar (21.8%), 

Kuwait (5.3%), Libya (4.1%) and Egypt (5.7%), while the production level 

remained almost the same in the United Arab Emirates, and declined in 

Syria by 1.8%. 

The marketed quantities remained the same in Tunisia at 

3.1billion cu m, and declined in Oman by 4.1% from 25.12billion cu m in 

2007, to 24.16 billion cu m in 2008. 

However, OAPEC total marketed natural gas rose from 12.8% in 2007 

to 13.2% in 2008, whereas total Arab marketed natural gas rose from 

13.7% to 14% in 2007 & 2008 respectively. Figures (2-12), (2-13) and 

Table (8-2).

Figure 2-13 

Marketed Natural Gas in OAPEC and OPEC Member Countries, 

2005-2008 

(Billion cubic meter/year) 

3-2-2 International Groups & Other States 

The Commonwealth of Independent States has witnessed an 

appreciable decline of 34 billion cu m in their marketed natural gas, which 

may be attributed to impediments in Ukraine’s pipelines since 2008. 

A 9% decline was recorded in Canada’s marketed gas from 18 billion 

cu m in 2007, to 16.7 billion cu m in 2008. 

Another decline was recorded in UK marketed gas quantity from 72.4 

billion cu m to 70 billion cu m between 2007 and 2008 respectively. 

On the other hand, a rise been realized in the United States of America 

natural marketed gas from 54.6 billion cu m to 58 billion cu m between 

2007 & 2008. About 10% rise has been achieved by China’s natural 

marketed gas from 69.3 billion cu m to 76 billion cu m between 2007 & 

2008. 

It is noteworthy that the total quantities of marketed natural gas in 

OPEC countries rose by 5.5%, from 53.6 billion cu m in 2007 to about 56.5 

billion cu m in 2008, marking a slight contribution of the OPEC countries

in the quantities of natural gas marketed from 18.2 % in 2007 to 18.4% in 

2008. Figure (2-13). 

II.COAL 

According to BP data, proven world reserves of coal decreased in 

2008 from their 2007level, falling from 847 billion tons in 2007 to 826 

billion tons in 2008, as shown in Table (2-9). Hard coal (anthracite) 

accounted for most of the 2008 reserves (49.8%), with an estimated total of 

about 411.3 billion tons. The decrease was mainly accounted for the United 

States of America, where estimated reserves dropped from 242.7 billion 

tons in 2007 to 238.3billion tons at the end of 2008. 

The world’s largest coal reserves are concentrated in North America, 

which accounted for about 29.6% of world reserves at the end of 2008 (with 

the United States of America alone accounting for 28.8%), followed by 

FSU countries with 26.4%, China with 13.9%, Australia with 9.2%, and 

India with 7.1%. See Figure (2-14). 

Figure 2-14 

World Coal Reserves, End 2008 

Billion tons 

World production of coal rose from about 6395.5 million tons in 2007 

to 6781.3 million tons in 2007. Hard coal accounted for most of the 

production with an estimated total of about 5845 million tons, of which 

China produced 2782 million tons in 2008, or 41% of the world total

production, followed by the United States of America with 1062.8 million 

tons, or 17.2% of the world total, then India with 512.3 million tons, or 

7.6%, next in line came Australia then the Russian Federation. See Table 

(2-10) and Figure (2-15). 

International trade in hard coal (anthracite and coke) totaled about 938 

million tons in 2008. Australia topped the list of exporters with exports 

totaling 252 million tons, followed by Indonesia with 203 million tons, the 

Russian Federation with 101 million tons, the United States of America and 

Colombia with 74 million tons each, and South Africa and China with 62 

and 47 million tons respectively. 

Figure 2-15 

World Production of Hard Coal, 2008 

(%) 

The main importers of coal was Japan, whose imports of hard coal and 

anthracite totaled 186 million tons in 2008, followed by South Korea with 

100 million tons, Taiwan with 66 million tons, India with 60 million tons, 

Germany and China with 46 million tons each, and the UK with 44 million 

tons. 

In 2008, the international steel industry consumed about 13% (about 

717 million tons) of the total hard coal production, since more than 70% of 

the industry relies on coal. 

Coal accounted for around 41% of world electricity generation in 

2006. Countries that rely heavily on coal for their power generation 

(according to 2007 data) include South Africa (94%), Poland (93%), China

(81%), Australia (80.0%), China (78), Occupied Palestine (71.0%), 

Kazakhstan (70.0%), India (68%), the Czech Republic (62%), Morocco 

(57%), Greece (55%), the United States of America (49%) and Germany 

(49%). 

Since coal is the most environmentally harmful fuel and most of its 

reserves lie in the industrial countries, these countries are trying hard to turn 

it into clean (green) fuel. Research centres are working round the clock to 

find a way to convert coal to gas in the coal mines so as to cut gas 

emissions into the atmosphere, and to develop economically feasible 

technology for converting coal into liquid fuel (CTL). 

In the Arab countries there were no significant developments in 2008 

concerning the coal mining industry. El-Maghara mine, located in the Sinai 

Peninsula in Egypt, is the only operating coal mine. Morocco is working on 

re-exploiting the coal from some of its mines that had been closed. 

III. NUCLEAR ENERGY 

Nuclear reactors currently generate electricity in 30 countries, mainly 

in the United States of America, Western Europe, and developed countries 

in Asia such as Japan and South Korea. However, most of the new reactors 

currently being built are in Asian countries such as Japan, South Korea, 

China and India. The building of new reactors stopped in the United States 

of America and most Western European countries since the 1980s. But the 

year 2007 witnessed the construction of 11 reactors worldwide 6 of which 

were in China, and 1 in each of South Korea and the Russian Federation. 

Two reactors came back online in Russia, and two more in Slovakia. 

The world was estimated to have 55 reactors under construction in 

2008, 43 of which are located in Asia (20 in China, 6 in South Korea, 5 in 

India, and 1 in Japan, Iran and Pakistan each). See Table (2-11). 

At the end of 2009, the number of nuclear power reactors in operation 

reached 437 with a total design capacity of 370187 MW, and a total of 55 

reactors were under construction with a total capacity of 50855 MW. 

The electricity generated by nuclear reactors in 2008 amounted to 

about 2738 terawatt-hours, which is equivalent to 13.6% of all the 

electricity generated worldwide.

In 2009, two new reactors came into service, one in Japan with a 

capacity of 866 MW, and another reactor in Idea with a capacity of 202 

MW. On the other hand, three reactors were permanently mothballed, two 

of which were in Japan with a capacity of 505 and 806 MW respectively, 

and another one in Lithuania with a capacity of 1185 MW, thus the 

Republic of Lithuania has renounced the use of nuclear energy to generate 

electricity. According to International Atomic Energy Agency (IAEA), 

since nuclear power began to be used to generate electricity through 2009 

the number of reactors mothballed was 123 with a total capacity of 37835 

MW. Nuclear power accounted for about 76.7% of total power generation 

in France in 2008, 56.7% in Slovakia, 50.2% in Belgium, and 46.9% in 

Ukraine. It accounted for around 19% in the United States of America, 

28.1% in Japan, 32.6% in South Korea, and 2% and 1.9% in China and 

India respectively. 

As for the future of nuclear power, following recent oil price 

increases, the importance and possible use of nuclear power were reviewed 

in some countries. In this context, once again attention focused on nuclear 

fusion technology. Some industrial countries started building new reactors 

again like Russian Federation, United States and France. In some 

developing countries, attention has focused on acquiring nuclear technology 

for peaceful purposes, mainly electricity generation. 

In the Arab states, following the resolution of the GCC states summit 

concluded in December 2006 which called for the use of nuclear power for 

peaceful purposes, the Arab summit convened in Riyadh, 28-29 March 

2007 issued a similar resolution. It was followed by talks with the 

International Atomic Energy Agency and with countries that build reactors, 

especially France and the United States of America, which reached an 

understanding with some Arab countries on building reactors for electricity 

generation and using nuclear power for peaceful purposes. 

The United Arab Emirates UAE signed an agreement with a 

consortium led by state- owned South Korean Electric Power Corporation, 

US-based Westinghouse Electric and some other companies, to supply four 

nuclear power plants, each producing approximately 1400 MW of 

electricity. The first reactor is expected to be in service in 2017. 

Kuwait and France signed a cooperation agreement for the peaceful 

use of nuclear energy. Moreover, South Korea will build the first nuclear 

reactor of Hashemite Kingdom of Jordan in 2014. Egypt- in turn- has 

signed an agreement with Russia to pave the way to build the first nuclear

power plant in the country, the first reactor is expected to be established on 

the coast of Mediterranean at a cost of $1.5 billion. 

In general, it can be said that the future of nuclear power remain 

uncertain, and that any expansion in the short term will mostly occur in 

developing Asian countries, in particular China and India. 

IV. RENEWABLE ENERGY SOURCES 

Despite serious attempts to develop the use of renewable energy 

sources in order to reduce fossil fuel use, these energies with the exception 

of Hydropower are still -in the most part- either technically immature or 

they are unable to compete economically in the absence of financial support 

or direct intervention in the market mechanism by the governments. 

The Arab region is characterized by the presence of abdundat 

quantities of fossil fuels. Due to the civilization development in the region, 

electricity consumption has increased dramatically, and so has the 

establishment of power stations. However, the lack of electricity in remote 

areas, led some states and governments to consider renewable energy 

sources, especially wind and solar energy. Renewable energy sources 

include hydroelectricity, solar, wind, geothermal, biomass, ocean, and tidal 

energy. 

One of the major developments relating to renewable energy in 2009 

was the establishment of the International Renewable Energy Agency 

(IRENA) on January 26 th 2009, where United Arab Emirates was 

designated at the interim public headquarters of the IRENA in the city of 

Abu Dhabi. The IRENA's objectives include the dissemination of 

knowledge and development of regulatory frameworks for renewable 

energy, in addition to raising awareness about the concepts and 

technologies of this energy around the world. 

Middle East and North Africa centre for Renewable Energy (MENA) 

was established and based in Cairo-Arab Republic of Egypt. Egypt has been 

selected after extensive study by the consulting firm mandated by the 

German and Danish governments. The centre aims to support and promote 

investment opportunities in favour of the development of renewable energy 

applications. 

Egypt is working on reaching 20% of its electricity production using 

renewable energy by 2020. Libya is aiming to achieve 6% of electricity 

from renewable energy by 2020 as well. By the end of 2009, Lebanon 

declared Government’s target of reaching 12% of electricity production 

from renewable energy by 2015.

1. Hydropower 

1-1 Hydropower in the World 

According to the World Energy Council (WEC), the total installed 

hydropower capacity in the world amounted to about 848.456 GW in 2007, 

compared to 778.038 GW at the end 2005. According to the International 

Energy Agency (IEA), the total installed hydropower capacity in its 

member countries amounted to 426.3 GW in 2007 compared with 423.9 

GW in 2006. Meanwhile, in OECD countries it amounted to about 441.2 

GW in 2007, compared with 435.8 GW in 2006. 

In this regard, China ranked first, where its total installed hydropower 

capacity reached 147 GW by end of 2007. In 2007 the United States of 

America (USA) was ranked second with about 99.7 GW, compared with 

99.2 GW in 2006, Canada came third with total installed hydropower 

capacity of 73.6 GW in 2007, compared with 72.8 GW in 2006. In Japan, 

total installed hydropower capacity amounted to 47.31 GW in 2007. As for 

France, the total installed hydropower capacity was 25.13 GW in 2007. 

In Mexico, the total installed hydropower capacity reached about 13.1 

GW in 2007, compared with 10.7 GW in 2006, where annual growth rate 

reached its highest level (22.44%) between 2006 and 2007. 

In Turkey, total installed hydropower capacity increased from 13.06 

GW in 2006, to 13.39 GW in 2007, with annual growth rate of (2.54%). 

The total installed hydropower capacity in UK rose from 4240 MW in 

2006, to 4269 MW in 2007 with annual growth rate of (0.68%). While in 

Germany annual growth rate was (-4.54%) between 2006 and 2007. Table 

(2-12) shows the total installed hydropower capacity in some countries. 

1-2 Hydropower in the Arab Countries 

Several Arab countries with which have sources, use hydropower for 

electricity generation, especially Egypt, Syria, Iraq, Sudan, Lebanon, 

Morocco, Algeria and Tunisia. Some of these countries have additional 

sources that are not exploited so far. 

According to the 2009 WEC statistics, the total installed hydropower 

capacity in the Arab countries until end of 2007 was estimated as 

follows: Egypt (2793 MW), Iraq (2225 MW), Syria (1505 MW), 

Morocco (1500 MW), Sudan (323 MW), Algeria (280 MW), Lebanon 

(280 MW), Tunisia (62 MW), Jordan (12 MW) and Comoros (1 MW).

2. Wind Energy 

2-1 Wind Energy in the World 

The total installed wind power capacity in the world amounted to 

about 122158 MW in 2008 compared with 94005 MW in 2007, according 

to statistics of British Petroleum (BP Statistical Review of World Energy, 

June 2009. See Table (2-13). 

Total cumulative wind power capacity in the 27 countries of the EU 

amounted to 64953MW at the end of 2008, compared with 56517 MW at 

the end of 2007, according to the European Wind Energy Association 

(EWEA). 

The United States of America ranked first in the world with total 

installed wind capacity of about 25170 MW at the end of 2008, compared 

with 16824 MW in end 2007. Germany came second with a total installed 

wind capacity of 23903 MW in 2008, compared with 22247 MW in 2007, 

while Spain came at the third place with a total installed wind capacity of 

16740 MW at the end of 2008, compared with 15131 MW at the end of 

2007. China came in fourth rank with a total installed wind capacity of 

12210 MW compared with 5910 MW in 2007. China aims at increasing its 

installed wind energy capacity to 100 GW by 2020. India came at the fifth 

rank with a total installed wind capacity of 9645 MW at the end of 2008 

compared with 7845 MW at the end of 2007. 

Italy came at the sixth rank with a total installed wind capacity of 

3736 MW at the end of 2008 compared with 3726 MW at the end of 2007. 

In Denmark, total installed wind capacity reached 3180 MW at the 

end of 2008 compared with 3125 MW at the end of 2007. 

The annual growth rate of the total installed wind capacity in Turkey 

reached the highest percentage (194.6%), among other world countries for 

the years 2007 and 2008, followed by Bulgaria (177.2%) then China 

(106.6%). 

In France, total installed wind capacity increased from 2454 MW at 

the end of 2007, to about 3404 MW at the end of 2008, its annual growth 

rate of total installed wind capacity reached (38.7%) between 2007 and 

2008. 

The annual growth rate in other countries for the years 2007 and 2008 

was as follows: Hungary (95.4%), Poland (71%), the United States of 

America (9.6%), Italy (37.1%), UK (34.7%), Portugal (33.1%), Sweden

(29.6%), Netherlands (27.4%), India (22.9%), Germany (7.4%), Denmark 

(1.8%), and Austria (1.3%). 

2-2 Wind Energy in the Arab Countries 

Wind Energy is available in most Arab countries on an estimated 

average of 1400 hr/year. The best site to wind energy are found in Oman, 

Egypt, and Morocco where full load hours of appropriate wind reach 2500 

hr/year with a wind speed ranging from 8 to 11 m/sec. 

Egypt seeks to reach 

2011/2012. 

965 MW of wind energy by the years 

According to the statistics of British Petroleum (BP Statistical Review 

of World Energy, June 2009), the total installed wind power capacity in 

Egypt reached 384 MW in 2008 compared with 310 MW in 2007. 

In Morocco, total installed wind power capacity increased from 124 

MW in 2007, to 206 MW in 2008. 

The same applies to Tunisia where total installed wind power capacity 

rose from 20 MW in 2007 to 54 MW in 2008. 

Total installed wind power capacity in 2007 amounted to 1 MW in 

Algeria, 6 MW in occupied Palestine, 2 MW in Jordan , and 1 MW in 

Syria. 

3. Solar Energy 

3-1 Solar Energy in the World 

According to IEA statistics, the installed photovoltaic capacity 

worldwide at the end of 2008 stood at about 13425 MW, compared with 

7866 MW in 2007. Germany was the world leader in using photovoltaic 

cells, with a cumulative installed capacity of about 5340 MW in 2008, 

compared with 3835.5MW in 2007. 

Spain came second in rank with a cumulative installed capacity of 

3354 MW in 2008 compared with 693 MW in 2007. Japan came third in 

rank with a capacity of 2144.2 MW in 2008 compared with 1918.9 MW in 

2007.

The United States of America came in the fourth rank with a capacity 

of 1168.5 MW in 2008, compared with 830.5 MW in 2007, as shown in 

Table (2-14). 

While Italy came fifth in rank with an installed capacity of 458.3 MW 

in 2008 compared with 120.2 MW in 2008. 

China has sit a target to raise the level of installed photovoltaic 

capacity to 2 GW by 2011, and 9 GW by 2020. 

In France, total installed photovoltaic capacity increased from 

75.2 MW at the end of 2007, to 179.7 MW at the end of 2008. 

In South Korea, total installed photovoltaic capacity rose from 

81.2 MW at the end of 2007 to around 357.5 MW at the end of 2008. 

The annual growth rate of installed photovoltaic capacity in Spain 

reached the highest percentage in the world (384%) between 2007 and 

2008, followed by South Korea with annual growth rate of (340.3%). 

The annual growth rates for different countries between 2008 and 

2008 were as follows: Italy (281.3%), France (139%), the United States of 

America (40.7%), Germany (39.2%), Switzerland (32.3%), Australia 

(26.7%), Canada (26.7%), the UK (24.3%), Japan (11.7%), and Mexico 

(4.8%). 

3-2 Solar Energy in the Arab Countries 

Solar energy is available in the Arab countries at rates more than other 

countries of the world, and the region is capable of using this energy 

efficiently. 

Some Gulf countries have built small solar-powered water 

desalination plants. Solar energy is also used for water heating in some 

Arab states (particularly in Hashemite Kingdom of Jordan ) through solar 

heaters. However, this method is less popular nowadays due to the lack of 

suitable specifications of solar heaters. 

The total installed photovoltaic capacity in Algeria amounted to 

1.4 MW at the end of 2005. 

Egypt continues its work at the Kuraymat solar thermal plant with a 

total capacity of 140 MW. While Morocco declared its plan to implement

Solar Energy Projects in five different locations with a total capacity of 

2000 MW. 

4. Geothermal Energy 

4-1 Geothermal Energy in the World 

According to the statistics of British Petroleum (BP Statistical Review 

of World Energy, June 2009), the installed geothermal capacity in the 

world amounted to 10469.7 MW in 2008, compared with 10045.5 MW in 

2007. 

According to IEA statistics, installed geothermal capacity in its 

member countries amounted to about 3919 MW in 2007, compared with 

3972 MW in 2006. Meanwhile, in OECD member countries, installed 

geothermal capacity amounted to about 5364 MW in 2007, compared with 

5354 MW in 2006. Installed geothermal capacity in IEA Europe member 

states amounted to 723 MW in 2007, compared with 720 MW in 2006. See 

Table (2-15). 

As shown in the table, the United States of America ranked first, with 

a total installed geothermal capacity of 2998.5 MW in 2008, compared with 

2936.5 MW in 2007, followed by the Philippines ranked second, with a 

capacity of about 1,978 MW in 2008, with no significant change compared 

to that capacity of 2007. Indonesia came in third rank with a total installed 

geothermal capacity of 1042.5 MW in 2008, compared with 982.5 MW in 

2007. Mexico came in the fourth rank with a total installed geothermal 

capacity of 964.5 MW in 2008, compared with 959.5 MW in 2007. Italy 

came fifth in rank, with a total installed geothermal capacity of 810.5 MW 

in 2008, without any change of previous year capacity. 

Total installed geothermal capacity in Turkey increased from 38 MW 

in 2007 to 83 MW in 2008, with the highest Annual growth rate (118.4%) 

between 2007 and 2008, compared to other countries among which: Kenya 

(28.3%), New Zealand (24.4%), Iceland (18%), Indonesia (6.1%), the 

United States of America (2.1%), and Mexico (0.5%). No significant 

changes in the annual growth rate were witnessed in following countries: 

Japan, Philippines, Italy, ElSalvador, Costa Rika and Portugal.

4-2 Geothermal Energy in the Arab Countries 

Geothermal Energy resources discovered in Arab countries are still 

limited, and geological survey operations are not yet completed. 

Nevertheless, limited unexploited potentials have been found in Egypt, 

Jordan, Yemen, Syria, Saudi Arabia, Morocco, Tunisia, and Algeria. 

5. Solid Biomass Energy 

5.1 Solid Biomass Energy in the World 

According to IEA Statistics, the installed solid biomass capacity in its 

member countries totaled about 23285 MW in 2007 compared to 22163 

MW in 2006. Meanwhile, in OECD member countries, it amounted to 

around 23577 MW in 2007 compared to 22455 MW in 2006. Table (2-16). 

In the IEA’s European members, the installed solid biomass capacity 

totaled about 14185 MW in 2007, compared with 13357 MW in 2006. 

The United States of America ranked first in installed solid biomass 

capacity, with about 7056 MW in 2007, compared with 6670MW in 2006, 

followed by Sweden in the second rank with a capacity of 2570 MW in 

2007, compared with 3202MW in 2006. Italy came in third rank with a 

capacity of 1936 MW in 2007 compared with 1923 MW in 2006, followed 

by Finland in the fourth rank with a capacity of 1757 MW in 2007 

compared with 1730 MW in 2006. 

Meanwhile, installed solid biomass capacity in Denmark fell 

significantly from 455 MW in 2006 to 333 MW in 2007. similarity, in 

South Korea, total installed solid biomass capacity dropped from 17 MW in 

2006 to 6 MW in 2007. In Austria, total installed solid biomass capacity 

increased remarkably from 766 MW in 2006 to 1699 MW in 2007. 

Annual growth rates of installed solid biomass capacity increased in 

some countries between 2006 and 2007, mainly in Austria (121.8%), 

Germany (28%), Czech Republic (9.1%), Netherlands (8.4%), Belgium 

(7.2%), the United States of America (5.8%), the UK (3.5%), Spain (2.1%), 

Finland (1.6%), and Italy (0.7%). On the other hand, the annual growth rate 

fell significantly between 2006 and 2007 in South Korea (-64.7%), 

Denmark (-26.8%), Sweden (-19.7%), and Canada (-5.4%). The annual 

growth rate remained unchanged in Australia, Mexico and Turkey

5.2 Solid Biomass Energy in the Arab Countries 

Solid biomass energy is used in the Arab countries for cooking and 

heating, especially in remote areas. However, these resources are relatively 

limited due to the semi-arid nature of most lands. Agricultural, animal and 

timber waste are the main source of biomass. 

6. Ocean and Tidal Power 

According to the IEA statistics the total installed ocean and tidal 

power in its member countries in 2007 remained unchanged from previous 

years at about 261 MW. France accounted for 240 MW, Canada for 20 

MW, and the UK for 1 MW.

PART ONE 

TABLES OF CHAPTER TWO 

ARAB AND WORLD DEVELOPMENTS IN THE 

EXPLORATION, RESERVES AND PRODUCTION OF 

ENERGY RESOURCES

Table 2-1 

Seismic Surveys Worldwide, 2005-2009 

(Crew /Month) 

2005 2006 2007 2008 2009 

Canada 23 20 17 17 7 

USA 59 61 71 72 65 

Latin America 19 22 29 32 35 

Europe 13 14 23 34 34 

CIS 27 36 42 48 46 

Middle East 14 15 18 29 34 

Africa 30 40 56 63 72 

Far East 47 42 42 61 70 

World total 232 250 298 356 363 

Sources: 

- OAPEC Data Bank. 

- World oil, Several issuse, Jan.- Oct. 2009.

Table 2-2 

Average Number of Active Rigs Worldwide, 2005-2009 

(Rig) 

2005 2006 2007 2008 2009 

Canada 458 470 346 379 206 

USA 1380 1648 1769 1878 1075 

Latin America 316 324 354 384 356 

Europe 70 77 78 98 84 

Middle East 248 238 265 280 252 

Africa 50 58 66 65 62 

Asia/Pacific 225 228 241 252 243 

World total 2747 3043 3119 3336 2278 

Sources: 


- Baker Hughes, January 2010.

Table 2-3 

Petroleum Discoveries in OAPEC Members and 

Other Arab Countries, 2005-2009 

2005 2006 2007 2008 2009* 

Oil Gas Oil Gas Oil Gas Oil Gas Oil Gas 

Algeria 5 3 12 7 5 15 2 9 8 8 

Bahrain - - - - - - - - - - 

Egypt 38 11 29 22 9 7 37 24 40 24 

Iraq - - 1 - - - - - 3 1 

Kuwait 2 - 1 - 1 - - - 1 - 

Libya 2 - 7 3 5 2 8 - 6 - 

Qatar - - - - - - - - - - 

Saudi Arabia 3 2 - 2 2 - - - 5 5 

Syria - - - 1 1 1 2 - 5 1 

Tunisia 1 - 4 1 3 - 2 2 1 - 

UAE - - - - - - - - - - 

Total OAPEC 51 16 54 36 26 25 51 35 69 39 

Oman 2 - - - - - 3 1 5 - 

Sudan 1 - 4 - - - - - - - 

Morocco - - - - - - - 1 - 3 

Yemen 3 - 5 1 - - 1 - 9 1 

Total Arab countries 57 16 63 37 26 25 55 37 83 43 

* Preliminary estimates. 

Sources: 


- Energy Resources Monitor, OAPEC, Several issues, 2009

Table 2-4 

Arab and World Oil Reserves, 2005-2009 

(Billion barrels at year end) 

2005 2006 2007 2008 2009* 

(%) 

Change 

2009/2008 

Algeria 12.27 12.20 12.20 12.20 12.20 0.0 

Bahrain 0.13 0.12 0.13 0.12 0.12 0.0 

Egypt** 3.70 3.72 3.86 4.19 4.40 5.0 

Iraq 115.00 115.00 115.00 115.00 115.00 0.0 

Kuwait 101.50 101.50 101.50 101.50 101.50 0.0 

Libya 41.46 41.46 43.66 44.27 44.27 0.0 

Qatar 25.29 26.19 25.09 25.41 25.41 0.0 

Saudi Arabia 264.21 264.25 264.21 264.06 264.06 0.0 

Syria 3.00 3.00 2.25 2.25 2.25 0.0 

Tunisia 0.31 0.40 0.37 0.43 0.43 0.0 

UAE 97.80 97.80 97.80 97.80 97.80 0.0 

Total OAPEC 664.67 665.64 666.07 667.23 667.44 0.03 

Oman 5.00 5.70 5.70 5.50 5.50 0.0 

Sudan 0.90 5.00 5.00 5.00 5.00 0.0 

Yemen 4.00 3.00 3.00 3.00 3.00 0.0 

Total Arab countries 674.57 679.34 679.77 680.73 680.94 0.03 

Angola 9.05 9.33 9.50 9.50 9.50 0.0 

Ecuador 5.18 5.18 6.37 6.51 6.51 0.0 

Indonesia 4.30 4.72 4.37 3.99 3.99 0.0 

Iran 136.27 138.40 136.15 137.62 137.62 0.0 

Nigeria 36.22 37.20 37.20 37.20 37.20 0.0 

Venezuela 80.01 87.32 99.38 99.38 99.38 0.0 

Total non-Arab OPEC 271.03 282.15 292.97 294.20 294.20 0.0 

Total OPEC 928.57 940.55 952.43 954.44 954.44 0.0 

Cont./

Table 2-4 Cont. 

2005 2006 2007 2008 2009* 

(%) 

Change 

2009/2008 

Brazil 11.24 11.77 12.18 12.62 12.80 1.4 

Canada 4.70 6.01 5.39 4.94 4.86 (1.6) 

China 18.25 16.30 16.30 16.30 20.35 24.8 

CIS 92.27 107.99 100.68 98.80 98.90 0.1 

Of which: Azerbaijan 7.00 7.00 7.00 7.00 7.00 0.0 

Kazakhstan 9.00 39.80 30.00 30.00 30.00 0.0 

Russian Federation 60.00 60.00 60.00 60.00 60.00 0.0 

Turkmenistan 0.55 0.60 0.60 0.60 0.60 0.0 

Uzbekistan 0.59 0.59 0.59 0.59 0.59 0.0 

Mexico 13.70 12.35 11.65 10.50 10.40 (1.0) 

Norway 9.69 7.85 6.87 6.68 6.68 0.0 

UK 4.03 3.87 3.60 3.41 3.08 (9.7) 

USA 21.37 21.76 20.97 21.32 19.12 (10.3) 

Rest of the world 57.32 16.20 26.76 28.32 27.51 (2.9) 

World total 1178.17 1165.59 1177.14 1177.82 1178.84 0.1 

OAPEC/ world (%) 56.4 57.1 56.6 56.6 56.6 

Arab countries/ world (%) 57.3 58.3 57.7 57.8 57.8 

OPEC/ world (%) 78.8 80.7 80.9 81.0 81.0 


** Official sources. 

Notes: Parentheses denote negative figures. 

- Canada's oil reserves exclude those of tar sands. 

- Canada's oil reserves of tar sands (175 Billion barrels) are not included in the world figures. 


- World's oil reserves exclude those of non-conventional oil. 

- World oil reserves exclude extra heavy oil and bitumen of Venezuela (94.2 Billion barrels) 

- 50% of the Divided Zone's oil reserves is added to each of Saudi Arabia and Kuwait oil reserves. 

Sources: 


- Oil & Gas Journal, 1 Jan. 2010. 

- OPEC Annual Statistical Bulletin, 2008.

Table 2-5 

Arab and World Natural Gas Reserves, 2005-2009 

(Billion cubic meters at year end) 

2005 2006 2007 2008 2009* 

(%) 

Change 

2009/2008 

Algeria 4580 4504 4504 4504 4504 0.0 

Bahrain 93 92 92 92 92 0.0 

Egypt** 1890 1910 2024 2128 2128 0.0 

Iraq 3170 3170 3170 3170 3170 0.0 

Kuwait 1586 1780 1780 1784 1784 0.0 

Libya 1491 1420 1540 1557 1557 0.0 

Qatar 25783 25636 25172 25466 25466 0.0 

Saudi Arabia 6899 7153 7305 7447 7447 0.0 

Syria 310 290 290 285 285 0.0 

Tunisia 78 64 55 65 65 0.0 

UAE 6060 6040 6072 6091 6091 0.0 

Total OAPEC 51940 52059 52004 52589 52589 0.0 

Oman 830 914 950 950 950 0.0 

Sudan 85 86 85 85 85 0.0 

Yemen 479 515 555 479 479 0.0 

Total Arab countries 53333 53574 53594 54103 54103 0.0 

Angola 46 270 270 272 272 0.0 

Ecuador 10 9 9 8 8 0.0 

Indonesia 2769 2659 2769 3100 3002 (3.2) 

Iran 27580 26850 26850 29610 29610 0.0 

Nigeria 5152 5215 5210 5249 5247 (0.0) 

Venezuela 4315 4708 4708 4983 4983 0.0 

Total non-Arab OPEC 39872 39711 39816 43222 43122 (0.2) 

Total OPEC 89441 89414 89359 93241 93141 (0.1) 

Cont./


2005 2006 2007 2008 2009* 

(%) 

Change 

2009/2008 

Brazil 326 303 348 365 364 (0.3) 

Canada 1603 1622 1648 1640 1754 7.0 

China 2350 2449 2272 2265 3030 33.8 

CIS 57227 56171 57052 56458 61301 8.6 

Of which: Azerbaijan 850 840 849 850 850 0.0 

Kazakhstan 1841 3000 2832 2407 2407 0.0 

Russian Federation 47574 47651 47572 47573 47573 0.0 

Turkmenistan 2011 2860 2832 2662 7504 181.9 

Uzbekistan 1875 1820 1841 1841 1841 0.0 

Mexico 412 408 392 373 360 (3.5) 

Norway 3286 2892 2241 2313 2313 0.0 

UK 531 476 412 343 292 (14.9) 

USA 5452 5925 5977 6732 6928 2.9 

Rest of the world 15846 17456 11406 11475 13591 18.4 

World total 180238 180987 175158 179289 187158 4.4 

OAPEC/world (%) 28.8 28.8 29.7 29.3 28.1 

Arab countries/world (%) 29.6 29.6 30.6 30.2 28.9 

OPEC/world (%) 49.6 49.4 51.0 52.0 49.8 



Notes: Parentheses denote negative figures. 

Sources: 




Table 2-6 

Arab and World Hydrocarbon Liquids Production, 2005-2009 

(Thousand b/d) 

First : Crude Oil Production 

2005 2006 2007 2008 2009* 

(%) 

Change 

2009/2008 

Algeria 1352.0 1426.0 1398.0 1356.0 1240.0 (8.6) 

Bahrain 186.6 183.3 184.3 182.2 182.4 0.1 

Egypt** 578.9 619.0 632.0 659.2 661.5 0.3 

Iraq 1912.7 1963.0 1851.0 2280.5 2400.0 5.2 

Kuwait** 2572.3 2644.0 2574.5 2677.5 2260.0 (15.6) 

Libya 1693.2 1761.0 1661.4 1721.5 1545.0 (10.3) 

Qatar 757.9 803.8 845.7 839.3 842.8 0.4 

Saudi Arabia 9353.3 9208.0 8978.6 8532.0 8190.0 (4.0) 

Syria 427.5 377.1 370.0 390.0 376.0 (3.6) 

Tunisia 65.5 96.5 70.0 85.0 82.0 (3.5) 

UAE 2378.0 2568.0 2557.0 2630.3 2270.7 (13.7) 

Total OAPEC 21277.9 21649.7 21122.5 21353.5 20050.4 (6.1) 

Oman 774.0 687.1 710.0 748.3 708.0 (5.4) 

Sudan 294.0 362.5 484.0 462.4 500.0 8.1 

Yemen 400.3 365.7 319.6 293.5 284.1 (3.2) 

Total Arab countries 22746.2 23065.0 22636.1 22857.7 21542.5 (5.8) 

Angola 1238.1 1391.8 1626.0 1896.3 1790.0 (5.6) 

Ecuador 514.6 536.5 510.0 501.4 470.0 (6.3) 

Indonesia 1059.3 883.0 849.0 856.7 850.0 (0.8) 

Iran 4091.5 4072.6 4013.0 4055.7 3725.0 (8.2) 

Nigeria 2365.9 2380.9 2166.5 2017.4 1810.0 (10.3) 

Venezuela 3128.0 3107.0 2991.8 3118.5 2170.0 (30.4) 

Total non-Arab OPEC 12397.4 12371.8 12156.3 12446.0 10815.0 (13.1) 

Total OPEC 32416.8 32745.6 32022.5 32483.1 29563.5 (9.0) 

Cont./


2005 2006 2007 2008 2009* 

(%) 

Change 

2009/2008 

Brazil 1634.0 1725.0 1761.0 1810.1 1950.0 7.7 

Canada 2368.8 2072.0 2182.2 2164.0 2530.0 16.9 

China 3617.2 3697.0 3755.0 3802.8 3773.0 (0.8) 

CIS 11076.3 11925.2 12192.3 12429.5 12661.0 1.9 

Of which: Azerbaijan 443.3 648.0 850.0 914.1 1000.0 9.4 

Kazakhstan 994.2 1105.3 1100.0 1385.0 1330.0 (4.0) 

Russian Federation 9190.0 9672.5 9830.0 9768.4 9915.0 1.5 

Turkmenistan 195.0 180.0 189.0 220.0 220.0 0.0 

Uzbekistan 113.0 108.0 114.0 105.0 85.0 (19.0) 

Mexico 3333.6 3260.8 3111.9 2807.7 2605.0 (7.2) 

Norway 2552.8 2353.6 2242.0 2020.0 2025.0 0.2 

UK 1644.9 1486.3 1460.0 1343.6 1305.0 (2.9) 

USA 5120.6 5136.3 5122.2 4940.2 5337.0 8.0 

Rest of the world 5881.5 14468.7 19727.4 18422.1 5959.1 (67.7) 

World Oil Production 72373.3 81561.7 86346.4 85043.7 70502.6 (17.1) 


Arab countries/world (%) 31.4 28.3 26.2 26.9 30.6 

OPEC/world (%) 44.8 40.1 37.1 38.2 41.9 

Second : Natural Gas Liquids Production 

OAPEC Members Production 2580.0 2542.0 2637.0 2501.0 2501.0 

Arab countries Production 2590.0 2552.0 2707.0 2599.0 2599.0 

World NGL Production 8294.0 8195.0 8288.0 9295.0 9295.0 

Third : Total Hydrocarbon Liquids Production 

World Total Production 80667.3 89756.7 94634.4 94338.7 79797.6 


Arab Countries/ world (%) 31.4 28.5 26.8 27.0 30.3 



Notes: 


- 50% of the Divided Zone's oil production is added to each of Saudi Arabia and Kuwait oil production. 

Sources: 



- Oil & Energy Trends, Annual Statistical Review, May 2009. 


Table 2-7 

NGL Production in OAPEC Members and Other Arab Countries, 

2005-2008 


2005 2006 2007 2008* 

(%) 

Change 

2008/2007 

Algeria 295 310 342 357 4.4 

Bahrain 10 10 10 10 0.0 

Egypt 65 65 68 70 2.9 

Iraq 30 30 30 30 0.0 

Kuwait 40 30 40 40 0.0 

Libya 60 60 73 80 9.6 

Qatar 210 200 326 349 7.1 

Saudi Arabia 1460 1427 1438 1434 (0.3) 

Syria 10 10 10 10 0.0 

UAE 400 400 300 250 (16.7) 

Total OAPEC 2580 2542 2637 2630 (0.3) 

Oman** - - 61 88 45.2 

Yemen 10 10 10 10 0.0 

Total Arab countries 2590 2552 2708 2728 0.8 

World total 9905 9229 9378 9295 (0.9) 




Sources: 


- Oil & Gas Journal Energy Database. 

- Oil & Energy Trends, Annual Statistical Review, May 2009.

Table 2-8 

Arab and World Marketed Natural Gas, 

2005-2008 

(Million cubic meters/year) 

2005 2006 2007 2008* 

(%) 

Change 

2008/2007 

Algeria 89235 88209 84827 86505 2.0 

Bahrain 10700 11100 11800 13400 13.6 

Egypt 42500 52800 55700 58900 5.7 

Iraq 1450 1450 1460 1880 28.8 

Kuwait 12300 12410 12060 12700 5.3 

Libya 11300 13195 15280 15900 4.1 

Qatar 45800 50700 63200 76981 21.8 

Saudi Arabia 71240 73461 74420 80440 8.1 

Syria 7200 7300 5600 5500 (1.8) 

Tunisia 2467 2373 3100 3100 0.0 

UAE 47790 48790 50290 50240 (0.1) 

Total OAPEC 341982 361788 377737 405546 7.4 

Oman** 21776 25139 25179 24156 (4.1) 

Total Arab countries 363758 386927 402916 429702 6.6 

Angola 650 680 830 680 (18.1) 

Ecuador 260 280 275 260 (5.5) 

Indonesia 68700 69300 68261 70000 2.5 

Iran 103500 108600 111900 116300 3.9 

Nigeria 22400 28500 32500 32825 1.0 

Venezuela 23444 20340 20729 20750 0.1 

Total non-Arab OPEC 218954 227700 234495 240815 2.7 

Total OPEC 498069 515915 536032 565461 5.5 

Cont./


2005 2006 2007 2008* 

(%) 

Change 

2008/2007 

Canada 185900 187000 183700 166900 (9.1) 

China 50000 58600 69300 76100 9.8 

CIS 813200 830900 848600 814650 (4.0) 

Of which: Azerbaijan 10400 7700 10300 14700 42.7 

Kazakhstan 15400 23500 27300 30200 10.6 

Russian Federation 635200 628400 607400 601700 (0.9) 

Turkmenistan na na 67400 66100 (1.9) 

Uzbekistan 63600 72000 58500 62200 6.3 

Mexico 39200 43400 46200 48600 5.2 

Norway 87000 90500 89700 99200 10.6 

UK 78000 80200 72400 69900 (3.5) 

USA 511800 524100 545900 582200 6.6 

Rest of the world 504593 504589 448436 537533 19.9 

World total 2852405 2933916 2941647 3065600 4.2 

OAPEC/world (%) 12.0 12.3 12.8 13.2 

Arab countries/world (%) 12.8 13.2 13.7 14.0 

OPEC/world (%) 17.5 17.6 18.2 18.4 



Notes: 


Sources: 


- Oil & Energy Trends, Annual Statistical Review, May 2009. 

- OPEC Annual Statistical Bulletin, 2009. 

- Statistical review of world energy full report 2009.

Table 2-9 

World Coal Reserves, 2005-2008 

(Billion tons at year end) 

2005 2006 2007 2008 

North America 253.2 253.2 249.3 244.9 

Canada 6.6 6.6 6.6 6.6 

USA 246.6 246.6 242.7 238.3 

Central & South America* 21.1 21.1 17.5 16.2 

Of which: Brazil 10.1 10.1 7.1 7.1 

Colombia 6.6 6.6 7.0 6.8 

Europe (except FSU) 59.8 59.8 46.3 46.3 

Of which: Germany 6.7 6.7 6.7 6.7 

Poland 14.0 14.0 7.5 7.5 

UK 0.2 0.2 0.2 0.2 

Asia/Oceania 296.9 296.9 257.5 259.3 

Of which: Australia 78.5 78.5 76.6 76.2 

China 114.5 114.5 114.5 114.5 

India 92.4 92.4 56.5 58.6 

Indonesia 5.0 5.0 4.3 4.3 

Former Soviet Union (FSU) 227.3 227.3 226.0 226.0 

Africa 50.3 50.3 49.6 32.0 

Of which: South Africa 48.8 48.8 48.0 30.4 

Middle East 0.4 0.4 1.4 1.4 

World total 909.0 909.0 847.5 826.0 

* Mexico is classified within Central and South America. 

Source: 

- BP Statistical Review of World Energy, June 2006, June 2007 , June 2008 and June 2009.

Table 2-10 

World Coal Production, 2005-2008 

(Million tons/year) 

2005 2006 2007 2008 

North America 1094.1 1120.8 1108.6 1130.5 

Canada 67.6 66.0 69.4 67.7 

USA 1026.5 1054.8 1039.2 1062.8 

Central & South America* 85.2 93.3 98.8 98.8 

Of which: Brazil 6.3 5.9 5.9 6.4 

Colombia 60.6 67.3 71.7 73.5 

Mexico 10.8 11.5 12.2 11.5 

Europe (except FSU) 724.7 719.1 725.9 726.1 

Of which: Czech Republic 62.0 62.4 62.6 60.0 

Germany 202.8 197.1 201.9 192.4 

Poland 159.5 156.1 145.8 143.9 

UK 20.5 18.5 17.0 17.9 

Asia/Oceania 3274.3 3503.0 3699.9 4049.1 

Of which: Australia 378.8 385.3 393.9 401.5 

China 2204.7 2373.0 2536.7 2782.0 

India 428.4 449.2 478.2 512.3 

Former Soviet Union (FSU) 467.5 489.6 488.3 522.0 

Of which: Kazakhstan 86.6 96.2 94.4 114.7 

Russian Federation 298.3 309.9 314.2 326.5 

Ukraine 78.8 80.2 76.3 77.3 

Africa 249.0 260.6 273.2 254.0 

Of which: South Africa 244.4 256.8 269.4 250.4 

Middle East 1.1 0.8 0.8 0.8 

World total 5895.6 6187.2 6395.5 6781.3 

* Mexico is classified within Central and South America. 

Source: 

- BP Statistical Review of World Energy, June 2006, June 2007 , June 2008 and June 2009.

Table 2-11 

Nuclear Power Reactors in Operation and Under 

Construction Worldwide 

(End of 2009) 

Country 

Reactors in 

Operation 

Reactors Under 

Construction 

Electricity Supplied 

by Nuclear 

Reactors 2008 

No. of Capacity No. of Capacity TWh* (%) of Total 

Units (MWe) Units (MWe) Electricity 

Argentina 2 935 1 692 7.2 5.8 

Armenia* 1 376 - - - - 

Belgium 7 5863 - - 45.8 50.2 

Brazil 2 1766 - - 13.9 3.1 

Bulgaria 2 1906 2 1906 15.8 35.0 

Canada 18 12577 - - 93.3 15.6 

China 11 8438 20 19920 68.4 2.0 

Czech Republic 6 3678 - - 26.5 31.0 

Finland 4 2696 1 1600 24.9 31.1 

France 59 63260 1 1600 440.3 76.7 

Germany 17 20470 - - 148.8 23.3 

Hungary 4 1859 - - 14.8 37.0 

India 18 3984 5 2708 15.5 1.9 

Iran - - 1 915 - - 

Japan 54 46823 1 1325 251.7 21.8 

Mexico 2 1300 - - 10.2 4.0 

The Netherlands 1 482 - - 4.2 3.9 

Pakistan 2 425 1 300 1.9 2.0 

Cont./


Country 

Reactors in 

Operation 

Reactors Under 

Construction 

Electricity Supplied 

by Nuclear 

Reactors 2008 

No. of Capacity No. of Capacity TWh* (%) of Total 

Units (MWe) Units (MWe) Electricity 

Romania 2 1300 - - 11.2 17.4 

Russia 31 21743 9 6894 163.0 15.7 

Slovak Republic* 4 1711 2 810 16.7 56.7 

Slovenia 1 666 - - - - 

South Africa 2 1800 - - 13.3 4.9 

South Korea 20 17647 6 6520 151.0 32.6 

Spain 8 7450 - - 59.0 19.0 

Sweden 10 8958 - - 64.3 43.1 

Switzerland 5 3238 - - 27.5 39.8 

Taiwan 6 4949 2 2600 40.8 17.2 

Ukraine 15 13107 2 1900 89.8 46.9 

UK 19 10097 - - 52.5 13.5 

USA 104 100683 1 1165 848.6 19.7 

Total 437 370187 55 50855 2738.6 13.6 

* According to IAEA 2008, Armenia’s reactors was mothballed, however, it is still listed 

in its statistics. 

Sources: 

- BP Statistical Review of World Energy, June 2009. 

- IAEA, Website.(Nuclear Power Plants Information), Jan. 2010.

Installed Capacity 

(Megawatt-MWe ) 

2006 2007 

China - 147000 - 

USA 99282 99770 0.49 

Canada 72838 73616 1.07 

Japan 47358 47313 (0.10) 

France 25125 25132 0.03 

Italy 21072 21117 0.21 

Turkey 13063 13395 2.54 

Mexico 10734 13143 22.44 

Austeria 11853 12009 1.32 

Australia 9285 9317 0.34 

Germany 8995 8587 (4.54) 

South Korea 5485 5492 0.13 

New Zealand 5345 5366 0.39 

United Kingdom 4240 4269 0.68 

Czech Republic 2175 2176 0.05 

Belgium 1414 1417 0.21 

Hungary 49 49 0.00 

Netherlands 37 37 0.00 

Denmark 9 9 0.00 

Note: 

Table 2-12 

Installed Hydro Power Capacities in some Countries, 

2006 and 2007 


Sources: 

- IEA Renewables Information 2009 . 

- WEC- World Energy Council 2009 (Survey of Energy Resources). 

Annual Growth Rate 

2006/2005 

(%)

Table 2-13 

Installed Wind Power Capacities in some Countries, 

2007 and 2008 



2007 2008 


2008/2007 

(%) 

USA 16824 25170 49.6 

Germany 2247 23903 963.8 

Spain 15131 16740 10.6 

China 5910 12210 106.6 

India 7845 9645 22.9 

Italy 2726 3736 37.1 

France 2454 3404 38.7 


Denmark 3125 3180 1.8 

Portugal 2150 2862 33.1 

Canada 1846 2369 28.3 


Japan 1528 1880 23.0 

Sweden 788 1021 29.6 

Austria 982 995 1.3 

Poland 276 472 71.0 

Turkey 147 433 194.6 

Norway 326 428 31.3 

Egypt 310 384 23.9 

Morocco 124 206 66.1 

Bulgaria 57 158 177.2 

Hungary 65 127 95.4 

Tunisia 20 54 170.0 

Sources: 

- BP Statistical Review of World Energy, June 2009. 

- EWEA- European Wind Energy Association 2009 . 

- Global Wind Energy Council, 2009 . 

- WEC- World Energy Council 2009 (Survey of Energy Resources).

Table 2-14 

Cumulative Installed Photovoltaic Power Capacities 

in some Countries, 2007 and 2008 

Cumulative Installed Capacity 


2007 2008 


2008/2007 

(%) 

Germany 3835.5 5340.0 39.2 

Spain 693.0 3354.0 384.0 

Japan 1918.9 2144.2 11.7 

USA 830.5 1168.5 40.7 

Italy 120.2 458.3 281.3 

South Korea 81.2 357.5 340.3 

France 75.2 179.7 139.0 

Australia 82.5 104.5 26.7 

Netherlands 52.8 57.2 8.3 

Switzerland 36.2 47.9 32.3 

Canada 25.8 32.7 26.7 

Austria 27.7 32.4 17.0 

United Kingdom 18.1 22.5 24.3 

Mexico 20.8 21.8 4.8 

Source: 

- IEA Trends in Photovoltic Applications 2009 .

Table 2-15 

Installed Geothermal Capacities in some Countries, 

2007 and 2008 



2007 2008 


2008/2007 

(%) 

USA 2936.5 2998.5 2.1 

Philippienes 1978.0 1978.0 0.0 

Indonesia 982.5 1042.5 6.1 

Mexico 959.5 964.5 0.5 

Italy 810.5 810.5 0.0 

New Zealand 471.6 586.6 24.4 

Iceland 485.5 573.0 18.0 

Japan 537.3 537.3 0.0 

Salvador 204.2 204.2 0.0 

Kenya 127.0 163.0 28.3 

Costa Rica 162.5 162.5 0.0 

Turkey 38.0 83.0 118.4 

Portugal 23.0 23.0 0.0 

Sources: 

- BP Statistical Review of World Energy, June 2009.

Table 2-16 

Solid Biomass Installed Capacities in some Countries, 

2006 and 2007 



2006 2007 


2007/2006 

(%) 

USA 6670 7056 5.8 

Sweden 3202 2570 (19.7) 

Italy 1923 1936 0.7 

Finland 1730 1757 1.6 

Czech Republic 1558 1700 9.1 

Austria 766 1699 121.8 

Canada 1505 1423 (5.4) 

Germany 1094 1400 28.0 

Australia 535 535 0.0 


Spain 388 396 2.1 

Denmark 455 333 (26.8) 

Belgium 307 329 7.2 


Mexico 292 292 0.0 

Turkey 72 72 0.0 

South Korea 17 6 (64.7) 

Note: 


Source: 

- IEA Renewables Information 2009 .

CHAPTER THREE 


PETROLEUM DOWNSTREAM INDUSTRIES 

1. World Developments 

I. REFINING INDUSTRY 

The total primary distillation capacity of crude oil in 2009 reached its 

highest level over eight years ago, rising by 1.6 million b/d above 2008. It 

totalled about 87.20 million b/d at the end of 2009 compared with 85.6 million 

b/d at the end of 2008. This increase associated with an increase in the number 

of operational refineries from 655 refineries in 2008 to 661 in 2009, reversed 

what had been a steady contraction during the last ten years, resulted from 

closing more than hundred refineries, due to its inability to compete. Figure (3- 

1). 

Figure 3-1 

Development of World Refining Capacity and the Number of Refineries 

2001-2009 

The rise in the total primary distillation capacity of crude oil was due to 

the expansion in some existing refineries in various parts of the world, in 

addition to the operation of new refineries in Asia and Middle East regions, as 

follows:

• 146,000 b/d Ras Laffan Refinery in Qatar, and 40,000 b/d Arbeel refinery in 

Iraq’s Kurdistan region. 

• 580,000 b/d Reliance Industries Ltd. Refinery in Qujarat state. 

• 148,000 b/d Dung Quat Refinery in Vietnam, which is the first refinery in 

this country. 

• 200,000 b/d Dushnzi Refinery in the far western Xinjang region in China. 

The Expansion in the existing refineries resulted from the following main 

projects: 

• US Refineries reveals a total capacity increase of 384,000 b/d 

• Marathon Company start up 180,000 b/d expansion project at Garyville 

Refinery in Louisiana State. 

• 6,8 b/d resulted from updating data of Kuwait refining capacity at its three 

refineries. 

• 115,000 b/d at two refineries in South Korea, and one refinery in Taiwan. 

Refining Industry faced several challenges during the year 2009, that 

affected its profitability due the global recession, the decline in petroleum 

products demand and the crude oil inventory expansion in global markets. 

The negative impacts of the global recession noticed mainly in United 

States of America, resulted in cancelling or delaying several upgrading projects 

in the existing refineries and closing some existing plants to avoid losses 

resulted from the increase of operating costs, as in the following examples: 

• Motiva Enterprises announced that it was delaying, for more than 2 years, the 

completion target for addition of 325,000 b/d distillation unit to its Port 

Arthur, Texas refinery. This $7 billion project is a joint venture of Shell US 

Company and Saudi Aramco. 

• Valero Energy Corp announced suspension of plans to add a new 50,000 b/d 

hydrocracker at each of its Port Arthur Refinery for cost of $1.7 billion and at 

Charles refinery for cost of $1.25 billion. 

• Shutting down the Gasifier Complex at Delaware, La, refinery. 

• Shutting down the Coker and Fluid Catalytic Cracking units at Corpus 

Christi, Texas, refinery. 

• Idling 150,000 b/d Eagle Point refinery in New Jersey. 

Japan also closed its smallest 57,000 b/d Nihonkai refinery in order to use 

it as a loading facility for petroleum products. Asia topped the world’s regions 

in terms of oil refining capacity increase in 2009 compared with 2008. The 

increase amounted to 1,050,000 b/d, or 4.67%. Then came North America with 

an increase of 383,000 b/d, or 1.86%. Then Middle east region with an increase 

of 200,000 b/d or 2.94%, but it declined by 30,000 b/d or 0.45% in South 

America and Caribbean region compared with 2008. Figure (3-2), Table (3-1).

Figure 3-2 

World Primary Distillation Capacity by Region, End of 2009 

In another development, the total capacity for catalytic conversion 

processes, which include fluid catalytic cracking (FCC), catalytic 

hydrocracking, and catalytic reforming, rose by 440,000 b/d, or 1.42%, from its 

2008 level. It totalled about 31.47 million b/d at the end of 2009, compared with 

31.03 million b/d at the end of 2008. Figure (3-3), Table (3-2). 

Figure 3-3 

World Catalytic Reforming Capacity by Region, End of 2008 

(%) 

Catalytic hydrocracking capacity recorded the biggest increase in total 

capacity compared with other catalytic conversion processes. At the end of 

2009 it rose to about 5.38 million b/d, compared with 5.14 million b/d or 4.67% 

at the end of 2008. Catalytic cracking came in second place with an increase of 

160,000 b/d, or 1.11%. Catalytic reforming capacity rose by 40,000 b/d, or

0.35%. It totalled about 11.52 million b/d at the end of 2009 compared with 

11.48 million in 2008. Table (3-3), Figures (3-4), (3-5) and (3-6). 

Figure 3-4 

World Catalytic Reforming Capacity by Region, End of 2008and 2009 

(%)

Figure 3-5 

World Catalytic Cracking Capacity by Region, End of 2008 and 2009 

(%)

Figure 3-6 

World Hydrocracking Capacity by Region, End of 2008 and 2009 

(%) 

As regards thermal conversion processes, which include both coking and 

thermal cracking processes, their total coke production capacity in 2009 was 

4800 tons/day, or 2.36% higher than in 2008. At the end of 2009 it amounted to 

207,540 tons/day, compared with 202,750 tons/day at the end of 2008. Most of 

the increase, around 3310 tons/day, or 2.57%, occurred in North America. Next

came Western Europe with 1,180 tons/day, or 10.23%. Then came Asia with 

300 tons/day, or 1.49%. Table (3-4), Figure (3-7). 

Figure 3-7 

World Capacity for Producing Coke from Thermal Conversion Processes by 

Region, End of 2009 

Total hydrotreating capacity recorded an increase of 600,000 b/d, or 

1.35%, compared with its 2008 level. It totalled 44.99 million b/d compared 

with 44.39 million b/d at the end of 2008. Asia-Pacific recorded the biggest 

increase of 330,000 b/d, or 3.51%, followed by North America with 170,000 

b/d, or 1.06%. Next came Western Europe with an increase of 100,000 b/d, or 

1.01%. Table (3-5), Figure (3-8). 

Figure 3-8 

Distribution of Hydrotreating Capacity by Region, End, 2009

2. Developments in Arab Countries 

The total primary distillation capacity of refineries in the Arab states 

recorded an increase of 233,000 b/d at the end of 2009 compared with its level 

in 2008.The increase is due to the start up of new 146,000 b/d Ras Laffan 

condensate refinery in Qatar, 40,000 b/d Arbeel refinery in Iraq’s Kurdistan 

region and 47,000 b/d resulted from the data updating of Kuwait refining 

capacity. 

The total primary distillation capacities of the 53 oil refineries in OAPEC 

member countries accounted for 7.061 million b/d, or 91.03 %, of the total 

primary distillation capacity of the Arab states, which amounted to 7.833 

million b/d. Total primary distillation capacity at the 11 oil refineries in other 

Arab states accounted for the remaining 772,000 b/d, or 8.97 %, of the Arab 

total capacity. Figure (3-9), Table (3-6). 

It is worth mentioning that the data of Iraq and Somalia has been updated 

after several years of disruption due to the difficulties in collecting the 

information from these two countries. 

Figure 3-9 

Evolution of Primary Distillation Capacity in the Arab Countries, 2005-2009 

(Million b/d) 

Like everywhere in the world, revamping and expansion projects for the 

existing oil refineries in OAPEC member countries and other Arab counties are 

still encountering a number of difficulties especially the construction projects 

for new refineries, which are still in the phase of feasibility study or engineering 

design. Tables (3-7) and (3-8).

Despite the decision in some Arab countries to postpone the 

implementation of the revamping projects in the existing oil refineries, willing 

to get more benefits from the reduction in construction cost, more attention is 

being given to these projects in order to achieve the following objectives: 

• Improve the capability of oil refineries to produce cleaner fuel and meet the 

standards and regulations of environment protection. 

• Improve the profitability through increasing the light petroleum products at 

the expense of heavy residue. 

• Improve the flexibility of the refining to process different type of Heavy 

Crude oils. 

In Algeria, Sonatrach signed EPC contract for revamping project of the 

existing Skikda refinery. The project will raise the refinery’s capacity from 

300,000 b/d to 335,000 b/d at a cost of $2.6 billion and expected to be 

completed in 2012. Similar contract was awarded for upgrading 50,000 b/d 

Arzew refinery to raise its capacity with around 22,000 b/d. 

Regarding the project of installing new 300,000 b/d Tiaret Refinery, it is 

still under evaluation. 

In Bahrain, Bapco is currently undertaking a visibility study for installing 

new 40,000 b/d conversion unit. The project will convert heavy atmospheric 

residue into Diesel and Gasoline, and expected to be completed in 2015, 

provided that funding will be available. 

In Egypt, the new refinery project in Ain al-Sokhna is still under 

evaluation, and it was announced that the revamping of Musturud refinery will 

be delayed due to lack of finance. The project cost is expected to rise from $2.7 

billion to $3 billion. The reason for the cost increase is the addition of new 

environmental protection facilities and products storage capacity. 

Midor refinery decided to reward the EPC contract for the 100,000 b/d 

delayed coking unit expansion project to French TECHNIP company. The 

project aims to improve the refinery flexibility to process higher ratio of heavy 

crude oil and expected to be completed by the third quarter of 2010. 

In Iraq, it was announced that 40,000 b/d Arbeel refinery started operation 

at Kurdistan region. The Iraqi Ministry of oil announced its strategic plan to 

raise the total refining capacity to meet the growing demand of local market for 

the petroleum products by installing five new refineries with a total capacity of 

840,000 b/d. The project is expected to be completed in 2015. The five 

refineries are as follows:

Planned New Refineries 

Capacity (1000 b/d) 

Nasiriya 300 

Kerbala 140 

Misan 150 

Kirkuk 150 

East Baghdad 100 

Moreover, it was announced the starting of expansion project of Dora and 

Basra refineries. The project includes installing new 70,000 b/d distillation unit 

in each refinery and expected to be completed in 2010. 

In Kuwait, Despite of the decision of postponing the construction of 

615,000 b/d fourth refinery at al-Zour terminal, the importance of the project is 

still under consideration. Moreover, there is a consensus to push the clean fuel 

project which involves revamping of the existing other three refineries. The 

revamping project aims to boost the capability of the existing refineries to 

produce high quality fuel, according to European standards (Euro IV), by 

cutting sulphur content in produced diesel from 2000 PPM to 500 PPM. The 

project includes the following works: 

• Capacity expansion at Mina-Abd Allah Refinery from 270,000 b/d to 

420,000 b/d. it will offset the decline in the capacity of Mina-Al Ahmadi 

refinery, which will be resulted from closing one of its 86,000 b/d distillation 

units. 

• Installing a new 156,000 b/d heavy atmospheric residue conversion unit at 

Mina-Al Ahmadi refinery. 

• Installing a new 45,000 b/d hydrotreatng unit at Mina-Al Ahmadi refinery. 

In Libya, Libya’s National Oil Corporation (NOC) announced the signing 

of a partnership agreement with investment companies, based in United Arab 

Emirates, for upgrading Ras Lanuf refinery, the biggest refinery in Libya, at an 

estimated cost of $2 billion. The project aims to reduce the quantity of fuel oil 

produced and increase the production rate of light products. 

It was announced that the revamping project of Azzawiya refinery will be 

carried out in two stages. The first stage involves renewing the existing units, 

raising the capacity of lube oil production plant from 45,000 b/d to 100,000 b/d, 

and adding new naphtha stabilizer, naphtha reformer and isomerisation units. 

The second stage will include installing a Residue Fluid Catalytic Cracking 

(RFCC), diesel hydrotreater, and sulphur recovery unit, in addition to capacity 

expansion of the existing utilities.

In Saudi Arabia, there was a delay in implementing some new projects, 

such as Jazan refinery project. The reason of the delay was not due to lack of 

funding, but to get more benefit from the current economic slowdown by 

accepting tempting offers from EPC contractors. 

The Kingdom announced that the construction work started at both 

projects of new refineries at Jubail and Yanbu with a refining capacity of 

400,000 b/d for each, and expected to be completed in 2013. These two projects 

will be the most advanced refineries in the Middle East and will be a strategic 

project for the Kingdom, in terms of product quality and quantity, their 

conformance to the environmental requirements and their ability to process 

heavy crude oil. 

The Kingdom is currently building four new refineries at Jabail,Yanbu, 

Ras Tannura and Jazan. Each refinery has a capacity of 400,000 b/d, which will 

boost the Kingdom’s refining capacity from 2,095,000 b/d to 3,695,000 b/d. 

Revamping of the existing refineries is still under way. It aims to boost 

their capability to produce high quality fuel, and includes the following: 

• The revamping project at the existing Saudi Aramco and Shell Refinery 

(SASREF), involves constructing of new hydrotreater and upgrading the 

existing unit. 

• The revamping of Ras Tannura and al-Riyadh refineries. 

• Rehabilitation of Al-Khafji Refinery, which was mothballed in 1990. 

• The expansion project at the existing Saudi Aramco Mobil Refinery 

(SAMREF). Phase I will involve the construction of a new hydrocracker, 

upgrading the existing middle distillate hydrotreater and construction of a 

fluid catalytic cracking unit at a cost of $700 million. Phase II will involve 

the construction of a 40,000 b/d hydrotreater, sulphur recovery unit and 

hydrogen producing unit at a cost of $800 million. 

In February 19.2009, it was announced that the first shipment of Saudi 

crude oil has arrived the terminal in China to start up the 240,000 b/d Fujian 

refinery, which owned by the coalition of Saudi Aramco, Exxon Mobile and 

China’s Sinopec. 

In Tunisia, the project of installing a new 120,000 b/d Al-shkaira refinery 

is still uncertain, and there was no progress witnessed in the memorandum of 

understanding signed by Qatar Petroleum and Tunisian Ministry of Industry and 

Energy for the project implementation, and currently the offer submitted by 

British Petrofac Co., regarding financing and implementing the project, is being 

evaluated.

In United Arab Emirates, Ruwais refinery`s revamping project is still in 

tendering stage for the preparation of EPC contract conditions, waiting for 

getting additional cost reduction, may reach about 15%. 

The project includes installing a new 127,000 b/d Fluid Catalytic Cracking 

unit which will be the biggest unit in the world, new lube oil production plant 

and utilities. It is expected to start operation in 2014 at estimated cost of $8-9 

billion. 

In Jordan, it was announced that, after finding a financing bank, the 

construction phase started at Al-zarqa refinery revamping project and will be 

implemented by an Italian–French consortium. 

In Sudan, it was announced that a visibility study for Obeid refinery 

revamping project will be carried out. The project aims to increase the 

refinery’s capacity from 15,000 b/d to 35,000 b/d at a cost of $200 billion. 

II. PETROCHEMICAL INDUSTRIES 


World ethylene production capacity in 2008 rose by more than 7 million 

tons/year, which was considerably a record level compared to the 2007 increase 

of 2 million tons/year and only 245,000 tons/year in 2006. This increase 

brought world ethylene production in 2008 to 126.7 million tons/year, or 6% 

higher than the 2007 total of 119.6 million. It was due to starting up five world 

scale ethylene plants all of them are in Iran and Saudi Arabia with combined 

capacity of nearly 6 million tons/year in addition to starting up new production 

trains in two existing plant. After several delays, Iran started up three new 

world scale ethylene production plants with total capacity of 3.42 million 

tons/year, and Saudi Arabia added 2.3 million tons/year as a result of starting up 

two new ethylene plants. 

The remaining 1.4 million tons/year were due to starting up new 

production trains in the existing plants, one in Kuwait for Equate Petrochemical 

Co. with a capacity of 800,000 tons/year and the other in China Lanzhou 

Petrochemical Co. limited with a capacity of 600,000 tons/year. No shutdown 

of ethylene plant was reported during the year. 

The main development of new ethylene plants are as follows:

Iranian National Petrochemical Company started up three world scale 

ethylene plants in 2008. The Arya Sasol Polymer Co., a joint venture of NPC 

and Sasol, started up a 1 million tons/day Assaluyeh ethylene plant, in early 

2008. Also in February 2008, Jam Petrochemical Company started its first 

ethylene production of 1.32 million tons/year in Assaluyeh, the Jam 

Petrochemical complex is the largest plant in Iran. The plant also produces 

305,000 tons/year of propylene, 216,000 tons/year of pyrolysis gasoline and 

other products. Iran’s Marun Petrochemical Co. started up 1.1 million tons/year 

ethylene plant at Bandar Imam in early 2008. Ethylene produced from this plant 

feeds a 300,000 tons/year of high density polyethylene plant and a 400,000 

tons/year of mono ethylene glycol plant. 

In Saudi Arabia, Al-Jubail ethylene plant owned by Tasnee Petrochmical 

Co. was completed in September 2008. The Capacity of the plant is 1 million 

tons/year of ethylene, 285,000 tons/year of propylene, and 800,000 tons/year of 

polyethylene. The Yanbu National Petrochemical Co. (YANSAB), a subsidiary 

of (SABIC), completed a world scale petrochemical complex at a capacity of 

1.3 million tons/year of ethylene. 

In China, China National Petroleum Corp’s Lanzhou Petrochemical Co. 

Ltd, started up a 360,000 million tons/year ethylene units in its Lanzhou plant. 

The total capacity of the plant is currently 600,000 million tons/year. The 

ethylene plant is integrated with company`s 250,000 b/d refinery. This capacity 

expansion was part of an integrated project and other units include 300,000 

tons/year of polypropylene, 650,000 tons/year of polyethylene, and 200,000 

tons/year of gasoline. 

Figure (3-10) shows the increases in world existing ethylene production 

capacities recorded in 2008. The increases recorded in 2008 were the highest in 

over 20 years ago, after the lowest increase rate recorded in 2006. New projects 

were expected to produce more than 10 million tons/year and come on stream in 

2009, but the world economic recession and ethylene oversupply in global 

market are likely to make that number far lower. 

Figure (3-11) shows that ethylene production capacity in Middle east is 

expected to rise to about 28 million tons/year in 2012, as several under 

construction world scale ethylene plant will come on stream in Saudi Arabia, 

Iran, Qatar, and United Arab Emirates. This expansion will rise the region’s 

capacity more than double from a 2007 level of 12.3 million tons/year. About 7 

million tons of this expansion will come from starting up two big ethylene 

production plants in Saudi Arabia in 2009. Also the first stage commercial 

operation in PetroRabegh complex (joint venture of Saudi Aramco and 

Somitomo Chemicals) was scheduled to start in second quarter 2009, with a 

capacity of 1.3 million tons/year of ethylene and 900,000 tons/year of 

propylene.

Figure 3-10 

Increase in World Existing Ethylene Production Capacity, 


Figure 3-11 

Ethylene Production Capacity in Middle East 


Eastern Petrochemical Co. (Sharq -III) scheduled to start up its 1.3 million 

tons/year ethylene plant in Al-Jubail, in addition to Saudi Arabia plans, which 

involve Kayan mega complex with a production capacity of 4 million tons/year 

of ethylene plant and the joint venture of Dow Chemical and Saudi Aramco to 

build 1.2 million tons/year ethylene plant.

In Iran, ethylene production capacity will rise to 8.4 million tons/year 

from its current level 4.7 million tons/year by 2012. 

Qatar Petrochemical Co. (QAPCO) plans to start up its 1.3 million 

tons/year ethylene production plant in Ras Laffan region by the second half of 

2009. Qatar Petroleum also has two other joint venture projects with Exxon 

Mobile and Shell Co. Both projects are for ethylene with a total production 

capacity of more than 1 million tons/year, however, neither is expected to come 

on stream before 2013. 

Table (3-9) shows the world’s ten largest ethylene production complexes. 

Nova Chemical Corporation’s 2.8 million ton/year Joffre Plant in Canada 

remains the top spot on the list. Equate Petrochemicals is a new listing in this 

table, the plant more than doubled its capacity to 1.65 million tons/year due to 

starting up its new production train (Olefins-II) at its Shuaiba plant in Kuwait in 

November 2008, to become the 10 th largest ethylene complex in the world. As 

a result, 1.64 million tons/year Freeport plant in Texas, owned by Dow 

Chemical Co. fell off the list. The capacity of Sweeny plant in Texas, owned by 

Cheveron Philips Chemicals, decline in 2008 to 1.844 million tons/year from 

1.868 million tons in previous year. 

Table (3-10) compares the existing world ethylene production capacity by 

region in 2007 and 2008. Figure (3-12) shows distribution of total existing 

ethylene capacities at the end of 2008. 

Figure 3-12 

Distribution of Total Existing Ethylene Capacities, end of 2008 

The Middle East is the biggest gainer. The region capacity increased more 

than 56% due to the addition of five new plant and one new production train

with total capacity of about 7 million tons/year. Asia-Pacific region added 

360,000 tons/year due to starting up CNPC`s Lanzhou expansion. 

Eastern Europe also recorded an increase of 59,000 tons/year compared to 

its last year capacity. Unipetrol, previously named Chemopetrol AS, reported a 

capacity increase in its Litvinov, Czech Republic, ethylene plant from 485,000 

tons/year to 544,000 tons/year. North America and Western Europe recorded a 

slight decline mounted 300,700 tons/year and 10,000 tons/year respectively. No 

change in production capacity recorded in South America. 

In USA, Chevron Philips reported a slight decrease in its Sweeny, Texas, 

ethylene complex. The decreases were offset by increased capacity in its Cedar 

Bayou and Port Arther plants in Texas. Cedar Bayou capacity increased to 

835,000 tons/year from 794,000 tons/year and Port Arther increased to 828,000 

tons/year from 794,000 tons/year. 

Table (3-11) shows world’s ethylene production capacity by country in 

2007 and 2008. 

Iran reported the biggest increase followed by Saudi Arabia, Kuwait, 

China, and finely the Check Republic. 

The only two countries reported a net decrease in capacity was the USA 

and the Netherlands with a total decrease of 310,700 tons/year. In USA the net 

increase in Chevron Philips`s plants were offset with the decrease in two Shell 

Chemical`s plants. Shell reported that the capacity in its Deer Park complex in 

Texas fell to 1.179 million tons/year from 1.426 million tons/year, and Norco, 

Complex in Louisiana fell to 1.451 million tons/year from 1.556 million 

tons/year. This is a combined drop of more than 350,000 tons/year. In the 

Netherland, SABEC reported a slight decrease in the ethylene production 

capacity of its Geleen plant. 

Table (3-12) lists the world’s ten largest ethylene producers in 2008. Two 

changes have taken place in the order of the companies. SABIC moved up to 

second from the third on the list, due to starting up its new plant which rose its 

production capacity to 8.4 million tons/year from 7.2 million tons/year, 

representing an 18% rise in its plants that fully or partially operate, passing 

Exxon Mobile Corp. whose capacity stayed the same as in 2007. 

Iran’s NPC is a newcomer to the list, coming in at the 7 th largest ethylene 

producer in the world. The company was not included in the list last year. NPC 

increased the capacity in its plant to 4.2 million tons/year from 1.2 million 

tons/year, or about 250% compared to 2007. Total AS dropped off the list due 

to this change.

2. Arab Developments 

2-1 Algeria 

Algeria is planning to attract international investment, through 

privatisation plan combined with expanding the cooperation with the foreign 

partners. During the past, the government was focussing on developing 

upstream oil and gas industry for export and now moving toward sharing 

companies from France, Italy, and Spain in the country`s petrochemicals sector. 

Despite the delay in implementing some of its projects, the government is still 

trying to develop and install new complexes for fertilizer, gas liquefaction and 

petrochemicals, in addition to expanding the capacity of oil refineries. 

Later on, the government has signed several contracts for developing the 

infrastructure of the upstream facilities that support the future growth of 

downstream and petrochemicals industries. In July 2009 Sonatrach signed a 

contract with Samsung Engineering Co. for carrying out the engineering works 

of expansion and improving the utilities of skikda refinery at a cost of $2.6 

billion. The contract includes rising the capacity of the refinery to 330,000 b/d 

from 300,000 b/d and installing new units for producing 700,000 ton/year of 

isomerate, 200,000 tons/year of paraxylene and 200,000 tons/year of benzene. 

The project, that expected to be completed within 3 years, is a part of 

Sonatrach`s plan to rise the refining capacity to 1 million b/d from 500,000 and 

diversify the final products. 

2-2 Egypt 

Egypt achieved significant progress in implementing the first stage of its 

national plan for petrochemicals, which expected to be completed in 2010-2011 

with a total cost of $4.6 billion. Early this year, 100,000 tons/year Alkyl 

benzene production plant in Al-Ameryia started up at a total cost of $520 

million, and 75% of the construction work was completed in the 1.3 million 

tons/year Ethanol production plant in Damietta with estimated cost of $950 

million. At the same time 70% of the construction work was completed in 

Egypt`s propylene and poly propylene Co. in Port-Saied. Also in Port Saied 

400,000 tons/year vinyl chloride monomer production plant is in progress. The 

plant will be the largest in Egypt, and half of its product will be used for 

producing 200,000 tons/year polyvinyl chloride and 275,000 of Caustic Soda, 

and expected to come on stream early 2010. 

Sanmar Chemicals, which changed its name from Trust Chemical 

Industries (TCI), agreed to provide a secured $565 million loan from Indian 

Bank, and the African Arab Bank will provide financing of $70 million as 

working capital.

2-3 Kuwait 

In November 22.2009, Equaite Petrochemical Co. started commercial 

operation in its new Aromatics Complex at Shuaiba, which owned by the 

Kuwaiti paraxylene production company, at a cost of $2 billion. At the first 

time, the complex is producing the paraxylene and Gasoline according to the 

best industrial standards. The production capacity of Equate Company and 

Equate-II comprises 825,000 tons/year of poly ethylene, 1.2 million tons/year of 

ethylene glycol, 450,000 tons/year of styrene monomer, 829,000 tons/year of 

paraxylene, and 393,000 tons/year of benzene. Kuwait`s Paraxylene Co. owned 

by Kuwait`s Aromatics Co., which is a joint venture of the Petrochemical 

Industries Co. (PIC) (40%), KNPC (40%), and Qurain Petrochemical Industries 

(20%). Equate Petrochemical Co. is the single operator of the mega Equate 

project, which involves Kuwait`s Styrene Co., Kuwait`s Paraxylene Co. and 

Kuwait`s Olefins Co. 

2-4 Qatar 

In November 25.2009, Qatofin, which is a joint venture of Qatar 

Petrochemicals (Qapco) (63%), French Total Co. (36%) and Qatar Petroleum 

(QP) (1%), inaugurated a poly ethylene plant at Mesaieed at a total cost of $1.2 

billion. The plant produces 422,000 tons/year of ethylene, 450,000 tons/year of 

low density polyethylene (LDPE) and 38,000 tons of butane gas. The company 

receive the main feed from the ethylene plant at Ras Laffan. 

Qatar Petrochemicals (Qapco) is working to operate Ras Laffan Olefin 

Company in the first quarter of 2010. Other company has an ownership share in 

the plant is Q-Chem (53%) which is owned by Qatar Petroleum and US 

Chevron Philips Chemical Co. The production capacity of the plant is 

1.3million tons/year of ethylene and will double ethylene exports in Qatar. 

2-5 Saudi Arabia 

Despite the International financial crises, which resulted in delaying the 

implementation of some EPC works, Saudi Aramco continues to implement the 

major petrochemical projects in which it participates. Aramco and Total signed 

several contracts for 13 different processes of EPC works in their Satorp joint 

venture project in Jubail, which includes a refining and petrochemicals 

complex. The total value of those work portfolios is about $9.6 billion. The 

awarding of the contracts delayed for some months. This delay provided 

Aramco and Total additional 20% reduction less than the total original 

estimated cost. Spanish Tecnicas Reunidas Co. won two contracts for 

construction of the utilities of distillation and hydrotreating units. At the same 

time, Technip won two contracts to supply Fluid Catalytic Cracking unit, 

Hydrocracking unit, some utilities, and the control system for whole refinery.

Samsung will undertake to construct the benzene and paraxylene production 

plants using Axens`s technology totalled cost of $700 million, and expected to 

be completed in the second half of 2010. A consortiums of Samsung and chioda 

will construct a delayed coking unit of at a total cost of $900 million. Also a 

contract was signed with Daelim Industrial to construct a sulphur 

recovery/amines plant at a total cost of $818 million and expected to come on 

stream in February 2013. 

In April 8.2008, Rabigh Refining and Petrochemical Co. (PetroRabigh) 

started up the first stage of Petrorabigh refining and petrochemical complex 

(Rabigh-I) which includes ethane cracker to produce 1.3 million tons/year of 

ethylene and new process units such as vacuum distillation, Gas oil 

Hydrotreater, as a preparation step for the start up of the Fluid Catalytic 

Cracking unit which will produce 900,000 tons/year propylene to be used as a 

feedstock for producing 700,000 tons of poly propylene and 200,000 ton/year of 

propylene oxide. The delay in starting up the first stage resulted in a rise in the 

project`s cost with about $300 million to reach $10.3 billion. 

In April19.2009, Saudi Aramco, Somitomo and PetroRabigh signed a 

memorandum of understanding (MOU) to carry out a visibility study to develop 

the first stage of Rabigh-I project in order to complete developing the 

petrochemical complex to a world scale and producing petrochemicals most of 

them are produced for the first time in the Kingdom. In Rabigh-II, the most 

advanced technology of Somitomo and other companies will be applied to get 

the most possible benefits from the integration between the first and second 

stages of Radigh project. The developing project comprises of expansion of the 

ethane cracker to process additional 30 million cubic feet/day of ethane 

feedstock, construction of a new aromatics plant, and producing specialty high 

added value petrochemical products such as acetone, acrylic acid, caprolactum, 

cumene, cyclic hexane, ethylene propylene dayene rubber, ethylene acetyl 

vinyl rubber, iso-butylene, try-methyl butyl ether, nylon-6, phenol, poly oley, 

methyl methacrylate, poly carbonate, poly methyl methacrylate and ultra high 

absorbing polymerate. The visibility study is expected to be completed by the 

third quarter of 2010. 

In June 2009, Saudi International Petrochemical Co. (Sipchem) signed a 

technology patents agreement with Exxon Mobile Petrochemical Co. for its 

plant in Jubail, which will produce 200,000 tons/year low density poly ethylene 

and vinyl acetate ethylene. This plant will be a part of Sipchem`s third 

manufacturing complex that will produce 200,000 tons/year of acrylonetryle, 

50,000 tons/year acrylic fibre, 3,000 tons/year of carbon fibre, 250,000 

tons/year methyl methacrylate, 30,000 tons/year of poly methyl metacrylate, 

50,000 tons/year of poly acetate, 30,000 tons/year of poly vinyl acetate, and 

50,000 tons/year of sodium cyanide. The project is expected to come on stream 

by the end of 2013. Sipchem started up acetyl complex in September 2009. The

complex includes two joint venture companies. The first is Acetyl International 

Co. for producing 410,000 tons/year of acetic acid and 50,000 tons/year of 

inhydrid acetic acid. The second is International Company for producing vinyl 

acetate that will produce 330,000 tons/year of vinyl acetate and 340,000 

tons/year of mono carbon oxide. Both companies were owned by Sipchem 

(87%) and Helm Arabia (10%). The new project is expected to consume around 

25% of the methanol produced from the Methanol International Co. 

2-6 UAE 

International Petroleum Investment Co. (IPIC), owned by Abu Dhabi`s 

government, invested in several companies worldwide The company aims to 

develop the petrochemical industry in Abu Dhabi and it has a plan to step up its 

investment portfolio to $20 billion from the current $15 billion over the next 

five years. In October 2008 it acquired 70% of the German MAN Firrostal Co. 

which is specialized in construction of oil, gas and petrochemical plants. 

Moreover, according to the decree issued by Abu Dhabi governor in 

February 2009, Abu Dhabi is initiating to develop the largest international 

petrochemical complex (Chemaweyaat) by establishing a joint venture between 

(IPIC), Abu Dhabi Investment Council, and ADNOC. 

The first stage of Chemaweyaat project will include installing a naphtha 

cracker at a cost of $20 billion. The project, located in Altaweelah industrial 

zone of Abu Dhabi, is expected to come on stream in 2013-2014, and in 2015 

this zone expected to involve more than 60 plastic manufacturers, with a total 

investment of $4.5 billion. 

In July 2009 IPIC acquired the Nova Chemicals Co., its headquarter based 

in Canada, against $2.3 billion. Nova Co. recorded net losses of $123 million in 

the first quarter of 2009 compared with $52 million in the first quarter of 2008. 

Dubai Multi Commodity Centre announced that three Asian companies 

started its operations in Dubai, as part of the free zone, which comprises the 

Polymer Marketing Co. Ltd (PTT), owned by the Thailand Polymer Co., Titan 

Co., owned by the Malaysian Titan Chemicals Co., and SGS Co., owned by the 

Thailand SCG Petrochemicals Co. These companies are using Dubai centre as a 

base for marketing its products to the all regions in the world, benefitting from 

the tax free advantage over 50 years.

NATURAL GAS CONSUMPTION, TRADE AND 

PROCESSING 


1-1 Natural Gas Consumption 

World consumption of natural gas in 2008 rose by 2.7%, compared with 

its level in 2007. World consumption of natural gas totalled about 3,018.6 

billion cubic meters in 2008, against about 2,937.9 billion in 2007. The share of 

natural gas in the world’s total commercial energy consumption rose from 

23.9% in 2007 to 24.1% in 2008. 

Table (3-13) and Figure (3-13) show the distribution of world natural gas 

consumption by region in 2007 and 2008. 

Most major regions of the world experienced growth in gas 

consumption at various rates in 2008. The lowest rate was 0.5%, recorded in 

Europe and Eurasia (including Europe, the CIS and Turkey). 

The highest rate was 7.8%, recorded in Middle East. Total consumption of 

natural gas in Europe and Eurasia amounted to about 1143.9 billion cubic 

meters in 2008, against 1138.3 billion cubic meters in 2007. This region 

remained the highest in terms of natural gas consumption in spite of the low 

level of growth in demand. Consumption of natural gas rose in Middle East to 

327.1 billion cubic meters in 2008, compared with 303.3 billion cubic meters in 

2007. 

Natural gas consumption in Asia-Pacific rose by 6.2% to 485.3 billion 

cubic meters in 2008, compared with 456.8 billion cubic meters in 2007. Next 

came Central and South America with an increase of 3.7%. Consumption of 

natural gas amounted to 143.0 billion cubic meters, compared with 137.9 billion 

cubic meters in 2007. 

In North America, natural gas consumption in 2008 increased by 1.5%, 

rising to 824.4 billion cubic meters from 812.4 billion cubic meters in 2007. 

Natural gas consumption rates rose in Africa by6.4%, amounting to 94.9 billion 

cubic meters, compared with 89.2 billion cubic meters in 2007. Although the 

increase in natural gas consumption was high in this region, its consumption 

remained the lowest in the world.

Figure 3-13 

Natural Gas Consumption by Region, 2008 

The share of natural gas in the commercial energy balance rose in all 

regions of the world in 2008. The Middle East region maintained the highest 

share of natural gas in the energy balance in 2008, amounting to 48.0% against 

47.3% in 2007. The share ranged between 11% in Asia/Pacific and 34.7% in 

Europe and Eurasia. Table (3-14) and Figure (3-14) show the evolution of the 

share of natural gas in total commercial energy consumption by region in 2005- 

2008 

Figure 3-14 

Share of Natural Gas in the Total Consumption of Commercial Energy, 

2005-2008 

(%)

1-2 Natural Gas Trade 

The volume of natural gas exports worldwide increased by 4.0% in 2008, 

rising to 813.77 billion cubic meters compared with about 782.42 billion in 

2007. These figures cover both gas exports via pipeline and LNG exports. 

Middle East topped the percentage increase in natural gas exporting of 

11.8% with an increase of 81.02 billion cubic feet in 2008 compared with 72.44 

billion cubic feet in 2007, as a result of the increase of 24.5% in liquefied 

natural gas exports in Qatar. Africa came second with an increase in exports of 

7.8%. Europe and Eurasia came in third place with an increase in exports of 

6.1%, as a result of the increase in natural gas exporting of 10.2% and 9.9% in 

Norway and Netherland respectively. Russia and allied countries was fourth 

with an increase of 4.7%. At the same time, the exporting of natural gas in 

Central and South America, Asia-Pacific, and North America declined in 

different percentages. 

US net imports of natural gas via pipeline in 2008 totalled about 104.41 

billion cubic meters, which represented about 15.9% of its total consumption of 

natural gas. Canada remained the largest natural gas supplier to the USA. In 

2008 the US imported LNG from Egypt, Norway, Nigeria, Qatar, and Trinidad 

and Tobago. LNG represented about 8.7% of total US natural gas imports (9.94 

billion cubic meters) and about 1.5% of the US consumption of natural gas. 

US exports of natural gas in 2008 increased to 27.15 billion cubic meters, 

or 29.7% over the 2006 record of 20.94 billion. Its exports to Canada totalled 

15.90 billion cubic meters and 10.28 billion to Mexico. Its exports of LNG to 

Japan totalled about 0.97 billion cubic meters. 

Russia topped the world’s natural gas exporters, with a share of about 

19.0% of world exports in 2008. Its natural gas exports via pipeline to most 

European countries totalled 154.41 billion cubic meters, which was 6.88 billion 

cubic meters more than that of 2007. Canada came second with 12.7%, 

followed by Norway with 11.7%, Algeria with 7.3%, Qatar with 7.0%, the 

Netherlands with about 6.8%, Indonesia with about 4.1% and Malaysia with 

about 3.8%. 

The exports of the aforementioned countries collectively constitute about 

72.3% of total world exports of natural gas. See Table (3-15) and Figure (3- 

15).

Figure 3-15 

Natural Gas Export Worldwide, 2008 

The volume of natural gas exported by pipeline rose from about 552.65 

billion cubic meters in 2007 to about 587.26 billion in 2008, or by 6.3%. The 

quantities of gas exported by tanker in the form of LNG declined from 229.77 

billion cubic meters to 226.51 billion cubic meters. Pipeline exports accounted 

for 72.17% of total natural gas exports in 2008, which was more than the 

percentage recorded in 2007 (70.64%). The exports in the form of LNG 

accounted for 27.83% of the total in 2008, against 29.37% recorded in 2007, as 

shown in Table (3-16) and Figure (3-16). 

Figure 3-16 

Natural Gas Export Worldwide, 2007-2008

Natural gas exports from Arab countries- either in the form of LNG or via 

pipeline-to international markets kept rising in 2008 for the fourteenth 

consecutive year, reaching 161.91 billion cubic meters compared with 150.9 

billion in 2007, an increase of 7.3%. 

Algeria maintained the highest share of total Arab gas exports in 2008. 

Algerian exports amounted to 59.37 billion cubic meters, representing 36.7% of 

total Arab exports. Qatar came second with total exports of 56.78 billion cubic 

meters, or 35.1% of total Arab exports, then Egypt with 10.5%, Oman with 

6.7%, Libya with 6.4%, and finally UAE with 4.7%, as shown in Table (3-17) 

and Figure (3-17). 

Figure 3-17 

Arab Natural Gas Export, 2008 

1-3 World Natural Gas Prices 

Prices of natural gas-exported, either in the form of LNG or via pipeline, 

witnessed a remarkable and unprecedented increase in some major markets 

during 2008, compared with 2007. 

The average prices of natural gas in UK markets rose to 79.5%, and 

the average price of natural gas transported to Japan (in a form of LNG) 

rose about 62.4%, and rose in the markets of the EU countries by 41.2%, 

while average prices in the Canadian markets rose 29.4%, and in US by 

27.3% at the same period, as shown in Table (3-18) and Figure (3-18).

Figure 3-18 

World Prices of Natural Gas, 2003-2008 

(USD/Million BTU) 

2. Arab Developments 

2-1 Algeria 

Algeria witnessed a significant natural gas discoveries resulted in boosting 

its exports of natural gas from about 62 billion cubic meters in 2009 to reach 85 

billion cubic meters/year over the next decade. Algeria is working to develop 

and boost its export capacity of natural gas via pipeline to Europe. The current 

natural gas liquefying capacity amounts to 44.2 million cubic meters/year of 

LNG (equal about 24 million tons/year). Algeria is working now to develop the 

capacity of it’s LNG cargoes fleet, which is currently amounts to 10 cargoes, 

with a capacity ranged from 36,000 to145,000 cubic meters and ordered two 

other ships at a capacity of 150,000 cubic meters for each, and expected to be 

received in 2012 and 2013. 

2-2 Bahrain 

Bahrain is still witnessing a high demand for natural gas, especially for 

electricity generation and water desalination. To meet this increasing demand, 

Bahrain is working on the development of its resources of natural gas through 

the following; 

- Developing of Bahrain field according to the production sharing and 

development agreement signed with US Occidental Co., Emirate`s 

Mubadalah, and Bahrain oil and gas holding Co. 

- Exploring for gas offshore (Deep structures). 

- Exploring for gas onshore.

At the same time, the kingdom is studying the options for importing the 

natural gas from the neighbouring countries to support the local production 

through constructing a new pipeline for transporting the gas, or new LNG 

unloading station. For this purpose Bahrain has been in negotiations with Iran 

and Qatar regarding the import of 1 billion cubic meters/day of natural gas. The 

kingdom also develops the basic legislation to preserve energy in all sectors. 

2-3 Egypt 

Egypt recorded a remarkable average growth in the marketed natural gas 

production by 13% during the period between 2000/2001 to 2008/2009. The 

production of natural gas totalled 6.6 billion cubic feet /day in August 2009, 6.2 

billion cubic feet/day of this quantity is a marketed gas (purchased) and the 

production rate of liquefied petroleum gases (LPG) reached 3,600 tons/day. 

Preparation for unloading the Egyptian gas in Lebanon is being 

undertaken, according to the agreement in principles signed previously between 

both countries. The agreement included the identification of contracting 

quantity, unloading points, time schedule, and all other technical and 

economical issues. It was agreed that the Egyptian companies will undertake the 

training works in addition to the operation, maintenance and commissioning of 

the gas network. Technical and economical committees have been assigned for 

implementing the project according to the scheduled plans. 

Egyptian government plans to remove subsidising the energy prices over 

the next five years and supply the energy products to the citizens in its actual 

cost by 2014, except the liquefied petroleum gases (LPG), which will be 

subsidised by cash payment to the worthy consumers. Petroleum sector has 

completed 90% of Al-saeid Gas pipeline which is the longest in the Egyptian 

gas pipeline grids. In addition to connecting the commercial and industrial 

centres, the number of housing units supplied by gas reached 3.3 million units. 

The plan that is being implemented aims at supplying more than 500,000 new 

customers over the current year. 

The Natural gas consumption rate in transportation sector amounted 

33million cubic meter/month in 2009.The number of vehicles converted to run 

on natural gas increased by 19% during the period from 07/2008 to 08/2009. In 

this context, the number of vehicles converted to run on natural gas amounted 

115,204 and there are (119) supply stations, more over new (19) stations which 

are under construction by the end of September 2009. There are now 6 

companies working in the vehicle`s conversion include 62 conversion centres.

2-4 Iraq 

Iraq is working on establishing a joint venture company with Shell and 

Mitsubishi. The company will undertake the investment in associated natural 

gas produced from the southern oil fields. The Iraqi south gas company (SGC) 

will own the most share (51%) of the joint venture, (44%) for shell and 5% for 

Mitsubishi. The produced gas and the associated products, such as condensate 

and the liquefied petroleum gases, will be sold in local market and the surplus 

will be exported to the international markets. Iraq also signed in principle an 

agreement for supplying the NABOCO project with the export natural gas. This 

project will be one of the exporting terminals of Iraqi gas to the world. 

2-5 Kuwait 

The plans for boosting the non-associated natural gas are witnessing 

significant progress. The current production rate reached up to 150 million 

cubic feet/day at the first phase. The second and third phases of gas production 

require great efforts in terms of the number of wells to be drilled and production 

facilities to be installed. 

On the other side, Kuwait is planning to import LNG via the gas 

unloading station which has been completed later on at a capacity of 500 

million cubic feet /day of natural gas to meet its local demand for the gas that 

outreach the production rate in the peak times in summer. 

2-6 Libya 

Libya is witnessing an implementation of several projects in natural gas, 

such as; 

- Exploiting Al-Nafoura gas field. 

- Tripoli-Melitah gas pipeline (coastal grid) 

- Alkhums-Tripoli gas pipeline and the pressure boosting stations (Coastal 

grid). 

- Developing Alfaregh gas field (second phase) 

- Increasing the production capacity of natural gas in the industrial complex 

(Melita). 

- Construction of gas transportation pipeline from the field (103A) to the 

Coastal grid. 

- Refurbishment of the liquids extraction from the natural gas of Intissar field. 

- Exploiting the associated gas produced from platforms (3,4) in Albouri 

coastal field. 

- Upgrading the gas liquefaction in Al-Bregha.

2-7 Qatar 

Qatar has been the world’s top LNG exporter since 2006, with a 

production and exportation of 54 million tons/year of LNG. Total LNG exports 

are expected to reach to 77 million tons/year in 2011, with the operation of 

Trains 6 and 7 of Qatar Gas 3, 4 projects and Train 7 of Ras Gas-III. In May 

2009, South Hook port in the UK was opened to receive and distribute the 

Qatari LNG. About five LNG shipments were received, and the Qatari gas 

entered the British natural gas grid. This project is a joint venture with Exxon 

Mobile, where Qatar Petroleum owns 70% of the project. The capacity of the 

terminal is 15.6 million tons/year of LNG. 

The Adriatic terminal for receiving LNG, at the north of Adriatic Sea, 15 

kilometres far from Veneto coast, is the first floating terminal in the world. It 

was designed for receiving, storing and converting the LNG to its gaseous 

statues. The project is a joint venture of Qatar Petroleum (45%), Exxon Mobile 

(45%) and Addison (10%). The capacity of this project is 6 million tons/year 

and can meet 10% of the Italian natural gas requirement. The terminal received 

the first shipment of Qatari gas by the carrier (Dukhan) in August 10.2009. 

Qatar rose its natural gas export to the United Arab Emirates and Oman 

Sultanate by 4.5% to reach up to 2.09 billion cubic feet/day, via Dolphin gas 

pipe line, since October 19.2009. 

At the end of August 2009, 82% of the engineering work on the Pearl 

project was completed. Laying the foundation stone for starting the construction 

work of the project was in February 22.2007 and due to its huge volume, more 

than 60 local and international contractors are working in the project. 

2-8 Saudi Arabia 

From the contracts signed during the year, Saudi Aramco aims at boosting 

its natural gas production, as part of its plan for satisfying the growing demand 

of the power and petrochemical plants. The company announced that it signed a 

contract for developing Karan field at the offshore region and the first phase of 

the project is expected to produce 450 million cubic feet/day by the middle of 

2010. The project includes, when it is completed, three gas treatment units at a 

capacity of 600 million cubic feet/day for each. A contract was also signed for 

utilising the natural gas condensates from Shaiba field. This field includes about 

25 trillion cubic feet of natural gas reserves in addition to crude oil and gas 

condensates. 

The kingdom`s main gas grid includes a plants for treating the total 

quantity amounts 9.5 billion cubic feet/day of natural gas and there is a plan for 

increasing the treating capacity up to 13 billion cubic feet/day, after completing 

the current project.

In 2009, a new plant in Hawiya was also started up to extract the 

additional quantities of condensates from the natural gas produced in Hawiya 

and Haradh fields and a new gas treatment plant will be started up in Al- 

Khursaniyah , north west of Al-jubail, at the beginning of 2010. 

2-9 Syria 

Based on the gas selling agreement, the Egyptian natural gas was supplied 

to Deir Ali power plant near Damascus at amount of 45 million cubic feet/day 

and then increased to 90 million cubic feet day. 

After signing the agreement for transfer/exchange of the Egyptian gas to 

Lebanon, at the beginning of September 2009, the gas arrived to Lebanon and 

the commissioning of the pipeline in Lebanon side is being implemented. The 

Syrian gas grid (Aleppo pipeline-Killis) is being connected to Turkish grid 

(Killis pipeline -Intab).This connection will allow the possibility of exporting or 

importing around 4-5 million cubic meters/day of gas to all European countries 

via Turkey. In August 2009, a memorandum of understanding was signed with 

the Turkish party for transporting the gas from and to Syria via Turkey, and 

then ratified by the Syrian government. Another memorandum of 

understanding signed with Iran for supplying 2-3 billion cubic meters/year to 

Syria via Turkey. Azerbaijan also offered the possibility to sell Syria 1 billion 

cubic meters/year of natural gas. 

2-10 UAE 

Emirate`s Dolphin Co. is importing around 1.6 billion cubic feet/day of 

natural gas from Qatar to meet the local demand for gas, for which the 

consumption exceeds the available supply. 

It was agreed in principle with the Iranian side for delivery of 4 billion 

meters/year of natural gas from the offshore Iranian fields. UAE is working on 

the construction of a new pipeline to supply gas to the consumption centres in 

the new power station at the eastern coast and others. Abu Dhabi National 

Company for Energy (Taqa) concluded an agreement with Russia`s Gazprom 

for investing Dh 4.4 billion in a gas storing project in the Netherland. The 

project is the largest gas storing facility allowed for third party in Europe. The 

construction work will start in an exhausted gas formation at north Amsterdam 

and expected to be completed in 2013. 

2-11 Jordan 

Jordan is seeking to sign agreement with one of the international 

companies for developing Al-Reesha natural gas field and to increase the 

production rate of the gas produced from this field to more than 330 million 

feet/day from the current rate of about 21 million cubic feet/day.

2-12 Yemen 

In August 2009, the natural gas liquefying complex in Balhaf was started 

up. The first LNG shipment exported from Yemen to South Korean markets in 

November 7.2009. The capacity of the carrier is 149,000 cubic meters. Another 

carrier called (Arwa), which is one of four carriers bought by the Yemen`s 

Company for LNG, is prepared to transport the second shipment (160,000 cubic 

meters) of gas to the Korean markets. The production capacity of the project is 

6.7 million tons/year with an estimated cost of more than $4.5 billion. 

3. World’s Most Important Gas Activities 

Australia is seeking to be one of main exporter of natural gas in eastern 

Asia. The Australian governments approved the giant project of Gorgon for 

LNG which is located at the country`s western side. The project will be 

implemented by sharing with a number of international companies, with 

estimated cost of $41 billion and expected to be completed in 2014. 

Turkmenistan will enhance its exports of natural gas to Iran after 

completion of a pipeline for transporting the gas between both countries. The 

gas exports will rise to 33 million cubic meters/day and expected to rise up to 

50 million cubic meters/day in the next phases. 

At the end of 2009, Turkmenistan started exporting about 30 billion cubic 

meters of natural gas via the gas pipeline to China across Asia. The project aims 

at meeting the growing demand of China for natural gas in addition to supply 

some countries located in the pipeline passage. The construction work in this 

pipeline started in 2007 with a total length of about 7,000 kilometres. 

In 2009 China and Qatar signed a memorandum of understanding to 

supply China with 3 million tons/year of LNG in addition to the quantities that 

previously agreed upon. 

Federal Russia is seeking to supply Europe with a quarter of its demand 

for natural gas in order to built new pipelines for transporting the natural gas 

without crossing Ukraine and other countries, after the disruptions of gas supply 

that happened as a result of the dispute raised between both countries. The first 

pipe line to be constructed is called (Russia’s Nord Stream) which will transport 

the natural gas to Germany across the Baltic Sea. The other pipeline (South 

Stream), under the Black Sea, will transport the natural gas supply directly from 

the countries of Caspian Sea to the European Union countries. In this regard, 

Federal Russia and the European Union signed cooperation agreement, in 

November 2009, for continuing the level of Russian energy supply, including 

natural gas, to the European countries. According to this agreement, Russia

undertakes to coordinate with the European countries and informing them in 

advance about the maintenance programmes of the production and gas 

transporting equipment, and the impact of these programs on supplies. 

Russia started exporting the liquefied natural gas to Japan from Sakhalin-2 

project and the first shipment amounted 67,000 tons. This project will help 

Japan to diversify its energy resources, which are mostly from Middle East, and 

will reduce the delivery time of the shipment, to 3 days instead of one week 

coming from south east of Asia. 

Brazil is working on exploiting the associated natural gas in the fields of 

the offshore giant Santos basin. The construction work in the project of natural 

gas liquefying platform has started and the capacity of the platform will be 3 

million tons/year of LNG which will be marketed via carriers. 

4. World’s Unconventional Natural Gas Resources 

In its study of the world energy outlook, published in 2009, the 

International Energy Agency (IEA) referred to the importance of the 

unconventional resources of natural gas and its role in adding new supplies to 

the conventional natural gas. The study expected that the world production will 

rise from 367 billion cubic metres/year in 2007 to 629 billion cubic meters /year 

by 2030. The contribution of this increase in total world natural gas supply will 

be 12% -15% during that period. It is also expected that these resources will 

affect the structure of natural gas markets and the prices in Europe and Asia 

pacific. The study also added that the share of these recourses (Tight Gas and 

Coal Bed Methane) is amounted more than 50% of US production in 2008 and 

expected to rise to about 60% by 2030 and this could be achieved at the gas 

price at well head ranged between ($3-$5)/ million BTU. 

The development of the unconventional resources is facing several 

challenges, especially in Australia, India, China, and European countries. 

Studies referred that the production cost of 380 trillion cubic meters of 

unconventional recoverable gas ranged between ($2.7-$9)/million BTU, while 

the production cost of 55 trillion cubic meters of natural gas from the 

conventional recoverable recourses ranged between ($0.5-$6) /million BTU.

PART ONE 

TABLES OF CHAPTER THREE 


PETROLEUM DOWNSTREAM INDUSTRIES

Table 3-1 

World Existing Topping Distillation Capacity by Region, 

2008 and 2009 

(Million b/d) 

2008 2009 Different 

(%) 

Change 

2009/2008 

Asia/Pacific 22.48 23.53 1.05 4.67 

North America 20.95 21.34 0.39 1.86 

Western Europe 14.91 14.91 0.00 0.00 

Eastern Europe/CIS 10.34 10.34 0.00 0.00 

Middle East 7.04 7.25 0.21 2.98 

South America/Caribbean 6.60 6.57 (0.03) (0.45) 

Africa 3.28 3.28 0.00 0.00 

Total 85.60 87.22 1.62 1.89 


Source: 

- Oil & Gas Journal, 22 Dec. 2008 & 21 Dec. 2009.

Table 3-2 

World Catalytic Conversion Capacity by Region*, 

2008 and 2009 

(Million b/d) 

2008 2009 

(%) 

Change 

2009/2008 

North America 12.67 12.67 0.00 

Asia/Pacific 5.95 6.32 6.22 

Western Europe 5.54 5.62 1.44 

Eastern Europe/CIS 2.68 2.68 0.00 

South America/Caribbean 1.84 1.84 0.00 

Middle East 1.62 1.61 (0.62) 

Africa 0.73 0.73 0.00 

Total 31.03 31.47 1.42 

* Includes catalytic cracking, hydrocracking and catalytic reforming. 


Source: 


Table 3-3 

Regional Catalytic Conversion Capacity by Process, 2008 and 2009 

(Million b/d) 

Catalytic Reforming Catalytic Cracking Catalytic Hydrocracking 

Different 

(%) 

Change 

2009/2008 

Different 

(%) 

Change 

2009/2008 

Different 

(%) 

Change 

2009/2008 

North America 4.18 4.23 0.05 1.20 6.67 6.54 (0.13) (1.95) 1.83 1.90 0.07 3.83 

Western Europe 2.18 2.19 0.01 0.46 2.19 2.25 0.06 2.74 1.17 1.18 0.01 0.85 

Asia/Pacific 2.14 2.12 (0.02) (0.93) 2.79 3.02 0.23 8.24 1.02 1.18 0.16 15.69 

Eastern Europe/CIS 1.47 1.47 0.00 0.00 0.88 0.88 0.00 0.00 0.33 0.33 0.00 0.00 

Middle East 0.65 0.65 0.00 0.00 0.36 0.36 0.00 0.00 0.60 0.60 0.00 0.00 

Africa 0.46 0.46 0.00 0.00 0.21 0.21 0.00 0.00 0.06 0.06 0.00 0.00 

South America 0.40 0.40 0.00 0.00 1.31 1.31 0.00 0.00 0.13 0.13 0.00 0.00 

Total 11.48 11.52 0.04 0.35 14.41 14.57 0.16 1.11 5.14 5.38 0.24 4.67 

* Includes catalytic cracking, hydrocracking and catalytic reforming. 


Source: 


Table 3-4 

World Coke Production Capacity from Thermal Conversion Process 

by Region, 2008 and 2009 

(Thousand tons/d) 


(%) 

Change 

2009/2008 

North America 128.76 132.07 3.31 2.57 


Asia/Pacific 20.11 20.41 0.30 1.49 


South America 24.64 24.64 0.00 0.00 

Middle East 3.30 3.30 0.00 0.00 

Africa 1.84 1.84 0.00 0.00 

Total 202.75 207.54 5.40 2.76 

Source: 


Table 3-5 

World Hydrotreating Capacity by Region, 2008 and 2009 

(Million b/d) 


(%) 

Change 

2009/2008 

North America 16.08 16.25 0.17 1.06 

Of which: Canada na na - - 

Mexico na na - - 

USA na na - - 


Asia/Pacific 9.39 9.72 0.33 3.51 


Middle East 2.04 2.04 0.00 0.00 

South America 1.90 1.90 0.00 0.00 

Africa 0.83 0.83 0.00 0.00 

Total 44.39 44.99 0.60 1.35 

Source: 


Table 3-6 

Installed Refining Capacity in the Arab Countries, 

2005-2009 


Number of 

Refineries 2005 2006 2007 2008 2009 

in 2009 

Algeria 5 450 450 463 463 463 

Bahrain 1 255 249 249 249 262 

Egypt 8 726 726 726 726 726 

Iraq 14 597 597 597 597 846 

Kuwait 3 889 889 889 889 936 

Libya 5 380 378 378 378 378 

Qatar 2 137 137 137 137 283 

Saudi Arabia 7 2095 2095 2095 2095 2095 

Syria 2 240 240 240 240 240 

Tunisia 1 34 34 34 34 34 

UAE 5 778 778 798 798 798 

Total OAPEC 53 6581 6573 6606 6606 7061 

Jordan 1 90 90 90 90 90 

Sudan 3 122 122 147 147 140 

Somalia - 10 10 10 10 - 

Oman 2 85 85 222 222 222 

Morocco 2 155 155 155 155 155 

Mauritania 1 25 25 25 25 25 

Yemen 2 130 140 140 140 140 

Total other Arab 

countries 

11 617 627 789 772 772 

Total Arab countries 64 7198 7200 7395 7378 7833 

Source: 

- Arab Oil & Gas Directory 2009. 


Table 3-7 

New Refinery Construction Projects in OAPEC Member Countries 

Country 

Project 

Refining 

Capacity 1000 

b/d 

Status 2008 Status 2009 

Algeria Tiaret 300 Feasibility study Feasibility study 

Egypt 

Musturud 50 Feasibility study Feasibility study 

Ain al-Sokhna 130 Feasibility study Feasibility study 

Nasiryia 300 Feasibility study Feasibility study 

Karbala 140 Feasibility study Feasibility study 

Iraq 

Misan 150 Feasibility study Feasibility study 

Kirkuk 150 Feasibility study Feasibility study 

East Baghdad 100 Feasibility study Feasibility study 

Kuwait Al-Zour Terminal 615 Bid studying Postponing 

Qatar Al-Shaheen 250 Feasibility study Feasibility study 

Yanbu 400 Basic engineering Construction 

Saudi Arabia 

Jubail 400 Basic engineering Construction 

Ras Tanura 400 Feasibility study Postponing 

Jizan 400 Feasibility study Postponing 

Furoqlos 140 Feasibility study Feasibility study 

Syria 

Deir Al-zour 140 Feasibility study Feasibility study 

Deir Al-zour-2 100 Feasibility study Feasibility study 

Tunisia Skhira 120 Feasibility study Feasibility study 

UAE Fujaira 500 Feasibility study Feasibility study

ojects in OAPEC Member Countries

Table 3-8 

New Refinery Construction Projects in Other Arab Countries 

Country 

Project 

Refining Capacity 

1000 b/d 

Status 2008 Status 2009 

Oman Tiaret 200 Feasibility study Feasibility study 

Sudan Port Sudan 150 Feasibility study Feasibility study 

Morocco Al-Jarf Al-asfar 200 Feasibility study Feasibility study 

Yemen 

Rass Issa 160 Engineering design Engineering design 

Hadramout 50 Feasibility study Feasibility study

ion Projects in Other Arab Countries

Company Name 

Table 3-9 

World Top 10 Ethylene Complexes* 

Location 

Production Capacity 

)Thousand tons/Year( 

1- Nova Chemicals Corporation 

2- Formosa Petrochemical Corporation 

3- Arabian Petrochemical Company 

Joffre, Alta , Canada 2812 

Mailiao, Taiwan, China 2550 

Jubail, Saudi Arabia 2250 

4- 

Exxon Mobil Chemical Company 

Baytown, Tex 2197 

5- Chevron Phillips Chemical Company 

Sweeny - Tex 1844 

6- 

Dow Chemical Company 

Terneuzen, Netherlands 1800 

7- Ineos Olefins & Polymers 

Chocolate Bayou, Tex 1752 

8- 

Equistar Chemicals 

Channel view , Tex 1750 

9- Yanbu Petrochemical Company 

10- Equate Petrochemical Company 

Yanbu, Saudi Arabia 1705 

Shuaiba,Kuwait 1650 

* As of Jan 1 ,2009. 

Source: 

- Oil & Gas Journal, 27 July, 2009

Table 3-10 

World Ethylene Capacity by Region, 

2007 and 2008 


(%) 

Change 

2008/2007 

North America 35708 35407 (300.70) (0.84) 

Asia/Pacific 33002 33362 360.0 1.09 

Western Europe 24928 24918 (10.00) (0.04) 

Middle East 10644 17614 6970.0 65.48 

Eastern Europe/CIS 8512 8571 59.0 0.69 

South America 5084 5084 0.0 0.00 

Africa 1698 1698 0.0 0.00 

Total 119575 126654 7079.0 5.92 


(Thousand tons at the beginning of the year) 

Source: 

- Oil & Gas Journal , 28 July, 2008 & 27 July, 2009

Table 3-11 

World Ethylene Production Capacity by Country, 

(Thousand tons /Year) 

Country 2007 2008 Different 

Azerbaijan 330 330 0 

Argentina 839 839 0 

Spain 1430 1430 0 

Australia 502 502 0 

Palestine 200 200 0 

Germany 5757 5757 0 

UAE 600 600 0 

Indonesia 520 520 0 

Uzbekistan 140 140 0 

Ukraine 630 630 0 

Iran 1214 4734 3520 

Italy 2170 2170 0 

Brazil 3500 3500 0 

Portugal 330 330 0 

Belgium 2460 2460 0 

Bulgaria 400 400 0 

Poland 700 700 0 

Thailand 2272 2272 0 

Turkey 520 520 0 

Czech Republic 485 544 59 

Algeria 133 133 0 

South Africa 585 585 0 

Russia 3490 3490 0 

Russian Federation 193 193 0 

Romania 844 844 0 

Singapore 1980 1980 0 

Slovak Republic 220 220 0 

Cont./


Country 2007 2008 Different 

Sweden 625 625 0 

Switzerland 33 33 0 

Chile 45 45 0 

Serbia and Montenegro 200 200 0 

China 6988 7348 360 

Taiwan 3621 3621 0 

France 3373 3373 0 

Venezuela 600 600 0 

Finland 330 330 0 

Qatar 1030 1030 0 

Kazakhstan 130 130 0 

Croatia 90 90 0 

Canada 5531 5531 0 

South Korea 5630 5630 0 

North Korea 60 60 0 

Colombia 100 100 0 

Kuwait 800 1650 850 

Libya 350 350 0 

Malaysia 1649 1649 0 

Norway 660 660 0 

Egypt 330 330 0 

Mexico 1384 1384 0 

Saudi Arabia 6800 9400 2600 

UK 2855 2855 0 

Norway 550 550 0 

Austria 500 500 0 

Nigeria 300 300 0 

India 2515 2515 0 

Netherlands 3975 3965 (10) 

USA 28793 28492 (301) 

Japan 7265 7265 0 

Greece 20 20 0 


Source: 


Table 3-12 

Top 10 Ethylene Producers* 

Company Name 

No. of Sites 

Production Capacity 

)Million tons/Year( 

of entire 

Complexes 

With only 

Company Parties 

interests 

1 - Dow Chemical Co. 15 14005 10711 

2 - Saudi Basic Industries Corp. 8 10235 8455 

3 - Exxon Mobil Corp. 15 11470 8352 

4 - Royal Dutch Shell Plc 10 8613 6489 

5 - Lyondell Basell (1) 8 6200 5450 

6 - Ineos 4 4656 4286 

7 - Iran National Petrochemical 7 4734 4234 

8 - Formosa Petrochemical Corp. 2 4091 4091 

9 - Sinopec 10 4375 4075 

10 - Chevron Phillips Chemical Co. (2) 5 4375 4052 

* As of Jan 1 ,2009. 

Notes: 

1 - Includes Subsidiary Equistar Chemicals Lp. 

2 - Owner Ship : Chevron Texaco Corp. 50 %, ConocoPhillips 50 %. 

Source: 


Table 3-13 

Consumption of Natural Gas by Region, 

2007 and 2008 

(Billion cubic meters) 

2007 2008 

(%) 

Change 

2008/2007 

Europe & Eurasia* 1138.3 1143.9 0.5 

North America 812.4 824.4 1.5 

Asia/Pacific 456.8 485.3 6.2 

Middle East 303.3 327.1 7.8 

South & Central America 137.9 143.0 3.7 

Africa 89.2 94.9 6.4 

Total 2937.9 3018.6 2.7 

* CIS , Europe and Turkey represented by Europe & Eurasia. 

Source: 


Table 3-14 

Share of Natural Gas in the Total Consumption 

of Commercial Energy by Region, 

2005 - 2008 

2005 2006 2007 2008 

Middle East 45.2 44.3 47.3 48.0 

Europe & Eurasia* 33.7 33.8 34.6 34.7 

North America 25.4 24.9 25.9 26.8 

Africa 19.8 20.3 23.5 24.0 

South & Central America 22.0 22.3 22.0 22.2 

Asia/Pacific 10.3 10.7 10.8 11.0 

Total 23.8 23.5 23.9 24.1 

(%) 


Source: 

- BP Statistical Review of World Energy, June 2006 & June 2007 & June 2008 and June 2009.

Table 3-15 

Natural Gas Exports by Region, 2007 and 2008 


2007 2008 

(%) 

Change 

2008/2007 

Europe & Eurasia* 180.31 191.22 6.1 

Of which: Norway 86.19 94.97 10.2 

Netherlands 50.06 55.00 9.9 

UK 10.36 10.50 1.4 

Eurasia & Other Europe 12.82 13.09 2.1 

FSU 153.63 160.91 4.7 

Of which: Russia 147.53 154.41 4.7 

Turkmenistan 6.10 6.50 6.6 

North America 132.09 131.56 (0.4) 

Of which: Canada 107.30 103.20 (3.8) 

USA 23.19 27.15 17.1 

Africa 107.20 115.61 7.8 

Of which: Algeria 58.70 59.37 1.1 

Egypt 15.96 16.92 6.0 

Libya 9.96 10.40 4.4 

Nigeria 21.16 20.54 (2.9) 

Asia/Pacific 104.18 102.51 (1.6) 

Of which: Australia 20.24 20.24 0.0 

Brunei 9.35 9.20 (1.6) 

Indonesia 33.13 33.50 1.1 

Malaysia 31.57 31.02 (1.7) 

Mynamar 9.88 8.55 (13.5) 

Middle East 72.44 81.02 11.8 

Of which: Oman 13.12 10.90 (16.9) 

Iran 6.16 5.80 (5.8) 

Qatar** 45.61 56.78 24.5 

UAE 7.55 7.54 (0.1) 

South America of which: 32.57 30.94 (5.0) 

Bolivia 11.73 11.79 0.5 

Trinidad & Tobago 18.15 17.36 (4.4) 

Total 782.42 813.77 4.0 




Source: 


A- Exports by Pipeline. 

2007 2008 

Europe & Eurasia * 180.17 32.6 189.03 32.2 

FSU 153.63 27.8 160.91 27.4 

North America 130.91 23.7 130.59 22.2 

Africa 45.58 8.2 53.43 9.1 

Asia/Pacific 17.06 3.1 16.82 2.9 

Middle East 10.88 2.0 22.90 3.9 

South America 14.42 2.6 13.58 2.3 

Total World Exports by Pipeline 552.65 100.0 587.26 100.0 

B- Exports as LNG. 

Table 3-16 

World Natural Gas Exports by Region, 

2007 and 2008 


Europe & Eurasia * 0.14 0.1 2.19 1.0 

FSU - - - - 

North America 1.18 0.5 0.97 0.4 

Africa 61.62 26.8 62.18 27.5 

Asia/Pacific 87.12 37.9 85.69 37.8 

Middle East 61.56 26.8 58.12 25.7 

South America 18.15 7.9 17.36 7.7 

Total World Exports as LNG 229.77 100.0 226.51 100.0 

Total World Exports 782.42 813.77 

Exports by Pipeline/ Total Exports (%) 70.63 72.17 

Exports as LNG/ Total Exports (%) 29.37 27.83 


Source: 


Table 3-17 

Arab Natural Gas Exports, 

2004 - 2008 


2006 

A- Exports by Pipeline. 

Algeria 35.12 39.08 36.92 34.03 37.50 

Qatar - - - 3.77 17.10 

Libya 0.50 4.49 7.69 9.20 9.87 

Egypt 1.10 1.10 1.93 2.35 2.86 

Oman 1.20 1.40 1.40 0.95 - 

UAE - - - - - 

Total Arab Exports by Pipeline 37.92 46.07 47.94 50.30 67.33 

B- Exports as LNG. 

Algeria 25.75 25.68 24.68 24.67 21.87 

Qatar 24.06 32.38 37.17 41.84 39.68 

Libya 0.63 0.87 0.72 0.76 0.53 

Egypt - 6.93 14.97 13.61 14.06 

Oman 9.03 9.22 11.54 12.17 10.90 

UAE 7.38 7.14 7.08 7.55 7.54 

Source: 

- BP Statistical Review of World Energy, June 2005, June 2006, June 2007, June 2008 and June 2009.

Table 3-18 

Average World Natural Gas Prices*, 2004-2008 

(Dollar/Million BTU) 

2004 2005 2006 2007 2008 

(%) 

Change 

2008/2007 

USA 5.85 8.79 6.76 6.95 8.85 27.3 

Canada 5.03 7.25 5.83 6.17 7.99 29.5 

Japan** 5.18 6.05 7.14 7.73 12.55 62.4 

European Union 4.56 5.96 8.69 8.93 12.61 41.2 

UK 4.46 7.38 7.87 6.01 10.79 79.5 

* Average CIF Prices. 

** LNG Prices 

Source: 


PART TWO 

OAPEC ACTIVITIES IN 2009 

CHAPTER ONE 

THE MINISTERIAL COUNCIL AND 

THE EXECUTIVE BUREAU 

I. THE MINISTERIAL COUNCIL 

The Ministerial Council of the Organization of Arab Petroleum 

Exporting Countries held its 82 nd meeting in Cairo, the Arab Republic 

of Egypt, on 25 th of May 2009. The meeting was at the level of 

Executive Bureau members representing the ministers and was chaired by 

H.E. Ahmed al-Ashmawi, the representative of the Arab Republic of 

Egypt on the Executive Bureau, as the Council held its 83 rd meeting in 

Cairo, Arab Republic of Egypt on 5 th of December 2009, under the 

chairmanship of HE Mr. Sameh Fahmi, Egypt’s Minister of Petroleum, 

which had to chair the 2009 session. 

With regard to resolutions adopted by the Ministerial Council in 

2009, refer to the press releases issued after the two meetings, which are 

appended to this Report. 

II. THE EXECUTIVE BUREAU 

OAPEC’s Executive Bureau held its 123 rd meeting in Cairo, the Arab 

Republic of Egypt, on 23 rd of May 2009 to compile the agenda for the 

82 nd meeting of the Ministerial Council, and it held its 124 th meeting in 

Cairo on 11 th of October 2009 to consider the 2010 draft budgets for the 

General Secretariat and Judicial Tribunal and to submit recommendations 

to the Ministerial Council’s 83 rd meeting. The Bureau also held its 125 th 

meeting in Cairo, the Arab Republic of Egypt, on 2 nd of December 2009 

for the preparation of the agenda for the aforementioned 83 rd meeting of 

the Ministerial Council.

CHAPTER TWO 

THE GENERAL SECRETARIAT 

I. THE DATA BANK AND RELATED ACTIVITIES 

1. Data Bank 

The General Secretariat has continued during 2009 in developing its 

Data Bank, and updating the data, this was reflected on the following main 

activities: 

1-1 Following-up Development of the Data Base 

- The Data Bank continued to update the database dependent primarily on 

data from member countries and that published by national Arab 

institutions and bodies. 

- In a cooperation with Information and Library Department , the Data 

Bank has developed a system of information storage, retrieval and 

updating for the library's Archive of the Secretariat using the techniques 

of the Oracle 10. 

- In collaboration with the Department of Personnel, the Data Bank works 

on developing a system for storage and retrieval and update the 

personnel system in the Secretariat using the techniques of Oracle 10. 

- The Data Bank has developed the Secretariat’s database system by 

making use of Oracle 10.1.3 instead of Oracle 10 in order to be more 

compatible with the new technologies used in this system. 

1-2 Reports and Papers 

- In collaboration with other departments of the Secretariat, the Data Bank 

compiled the Annual Statistical Report, 2009, covering the period 2004- 

2008. It was posted on the General Secretariat’s website and made 

available on CD-ROM. 

- The Data Bank helped the relevant departments in preparation of studies, 

papers and presentations undertook in year 2009. 

- The Data Bank compiled a publication of energy data by international 

grouping for 1970-2008, based on the British Petroleum Company’s 

database. The publication is updated annually, put on CD-ROM, and, in 

accordance with an agreement with BP, the distribution is limited to 

OAPEC member countries. 

- It published a booklet on energy data, including oil reserves, production, 

consumption, exports and imports using data provided by the Italian 

company ENI.

1-3 Workshop on Data Bank 

In implementation of the Secretariat’s 2009 Action plan and the 

recommendations of 81 st meeting of OAPEC’s Ministerial Council held on 

29 th of November 2008, the mentioned workshop held in the State of 

Kuwait, 8-9 April 2009. The workshop aimed to give an idea about the 

operating system of the Secretariat’s data bank and the structure of the data 

available, to the professionals and users of data banks in member countries. 

The workshop also aimed to exchange views and experiences on ways to 

improve the system's ability in order to meet the requirements and needs of 

the member countries. 

Personnel Data Bank provided a minutia explanation on the 

developments of Secretariat’s data bank, as they enable participants from 

member countries to make an access to the Secretariat’s database through 

its own website. In addition, they familiarize participants with database’s 

contents and identify the characteristics of the operating system and how to 

extract different kinds of reports and how to update the data. 

The workshop was attended by thirteen participants from member 

countries, distributed as follows: the United Arab Emirates (1), Bahrain (2), 

Saudi Arabia (2), Syrian Arab Republic (1), Qatar (2), the State of Kuwait 

(4), Arab Republic of Egypt (1). 

Another similar workshop was held on 21-22 April 2009, for 

participants from the Republic of Algeria and the state of Kuwait. 

1-4 Paper Entitled “General Secretariat’s Data Bank” 

The data Bank submitted a working paper on “General Secretariat’s 

Data Bank “ to Experts Working Group meeting related to gathering and 

analyzing Energy Statistics and indicators, which held at the UN 

headquarter, in Beirut, Lebanon, 3-5 March 2009. The event was 

organized by the Economic and Social Committee for West Asia 

(ESCWA). 

1-5 Other Activities 

- Updating General Secretariat’s website on a regular basis. 

- Upgrading and conducting maintenance of the Secretariat’s hardware 

and software. 

- launching a new link on OAPEC website for the ninth Arab Energy 

Conference which will help in following up the latest developments 

( aec9.oapecorg.org).

2. Information and Library Services 

The library continued to enter data related to new books, documents, 

and Arabic and foreign articles and periodicals. The library also provides 

information retrieval services for researchers from inside and outside the 

Secretariat. 

2-1 Bibliographical Services 

The Secretariat’s library continued to collect, disseminate and 

exchange information on various aspects of the petroleum industry, 

energy, economy and environment. This task achieved by paying attention 

to the acquisition of latest books, references, periodicals, hard and 

electronic papers and documents. 

Year 2009 witnessed the completion of several tasks which included 

documentation and bibliographic services of the following: 

- The bibliography for the quarterly journal Oil and Arab Cooperation, 

nos. 127-131, and for new books in the Library which distributed to all 

researchers in the General Secretariat. 

- Preparation of periodic acquired recently by the library. 

2-2 Indexing and Classification 

The library continued to carry out the implementation of technical 

services related to the area of indexing and classification. In 2009 the 

number of books and documents indexed and classified totaled 450. All 

the data of references and books that reach out to the library was entered 

on the auto archive system. The Library’s total collection of books and 

documents amounted to 35,027. 

2-3 Acquisition 

The acquisition service focused in 2009 on the following points: 

- Follow-up subscriptions of 438 Arabic and non-Arabic periodicals, as 

well as the publications of official bodies and government departments, 

institutions and oil companies in Arab countries. 

- Providing the library with new books and references, and following-up 

the updating of the references and books through the acquisition of the 

new editions, whether in hard copy or electronic one. 

- Monitoring the late arrival of local Arab and foreign periodicals. 

- Downloading e-journals which are delivered via General Secretariat’s 

e-mail. 

- Keeping up and arranging of electronic sources that the library receives.

2-4 Current Awareness and Lending 

- General Services: the library continued to provide its visitors with 

different services by responding to their queries, as well as providing 

other departments with photocopying of some periodicals when it 

necessary. 

- Lending: A total of 1231 books and periodicals were lent in year 2009. 

- Binding: In 2009, the library bound 360 periodicals, and welcomed 

about 210 visitors. 

3. Studies, Papers, and Reports 

3-1 A Study on " Energy Balance in South America and the Potential 

Market for Oil and Natural Gas from the Member Countries" 

In light of the importance gained by oil and gas in trade balances and 

their direct relationship with levels of economic cooperation, the study aims 

to review the evolution of the energy sector in the South America countries. 

The study focused mainly on reviewing the current and future situation 

of energy balance in South America countries, particularly in terms of oil 

and gas to determine their present and future potential, and to explore trends 

in imports of energy and the potential impact on the exports of member 

countries and other oil-producing Arab countries. Finally, the study 

intended to explore areas for cooperation between the South America 

countries and the member countries was identified. 

Part I reviews the main features of South America economies, and Part 

II deals with reviewing the energy sector in South America with focus on 

sources and uses of oil and natural gas. 

Part III deals with future prospects for oil and gas sectors in South 

America countries, where it reviews the outlook of continent's oil supply 

potential and the future prospect of demand until 2030. 

Part IV deals with the energy trade in South America by analyzing oil, 

natural gas and petroleum products exports and imports to South American 

countries at the regional and global levels. 

Finally, Part V reviews the optimistic view of the future prospects of 

cooperation between the OAPEC member countries and South American 

countries.

3-2 A Study on "The Global Financial Crisis and its Impact on The 

Initial Potential of the Oil Industry in the Arab Countries" 

In light of the importance of oil sector in the Arab economy, the study 

aims to review the implications of the financial crisis on global oil markets, 

focusing primarily on the initial potential repercussions on the Arab oil 

sector. 

The first part of the study reviewed the nature of the crisis, its root 

causes, its development, and the efforts taken to overcome it. This Part also 

dealt with the aggravation and expansion of the crisis beyond the U.S. 

market to the international market, and its development stages since it 

began, and the U.S. stimulus package. The second part dedicated to address 

the repercussions of the financial crisis and its impact on global oil markets. 

The third part addressed the position of Arab countries in the global 

petroleum market. Part fourth dealt with the potential impact of the 

financial crisis on the Arab economy. 

3-3 A Study on "The Role of Member Countries in achieving Stability 

in World Oil Market: Past, Present and Future" 

The study aims primarily to shed light on the role of member 

countries in the world oil market and its role in achieving stability in oil 

market in the past, present and future. 

The first part of the study shows the importance of member 

countries and their role in the international oil industry by clarifying its 

share of world oil reserves, production and exports. The focus of second 

part was on the global oil market stability where member countries 

played a vital role in influencing the market regulation and stability, 

through the Organization of Petroleum Exporting Countries(OPEC), 

which includes seven major Arab oil producers. The third part was 

devoted to address the issue of energy security and its importance in 

market stability, as energy security became a widespread term, 

especially in recent times. The fourth part was devoted to address the 

future role of the member countries in the global oil industry and in 

meeting the increasing global oil demand. 

3-4 A Study Entitled "The Distribution of Total Revenues of Oil 

Barrel and the Share of OAPEC’s Member Countries" 

The study aims mainly to review and analyze how the distribution of 

total revenues of oil barrel. The study included the following main parts: 

The first part of the study demonstrates the strategic position enjoyed by 

OAPEC member countries in the global oil market, as they possessed 

about 56.6% of world oil reserves, and approximately 25.7% of global

oil production. They also played an important role in global oil trade by 

dominating a share of 36% from total exported quantity. The second part 

covers the developments in OAPEC member countries’ oil revenues 

during the period 1997-2008. 

The third part of the study dedicated to clarify the position of major 

oil companies in oil market in order to conduct a comparison with that of 

OAPEC member countries. Part four deals with the trend of capital 

expenditure of these companies and their impact on various oil activities, 

it also dealt with profits generated from the sale of different petroleum 

products. The focus of Part five was on taxes imposed by G7 countries 

on oil consumption, and their share from final consumer price of 

petroleum products. 

Part six, which is the main focus of the study shows a comparison 

between OAPEC member countries’ oil revenues and oil-consuming 

countries tax revenues on the one hand, and between OAPEC member 

countries’ oil revenues and the income of the major oil companies on the 

other. It was clear from the comparison that G7 countries taxation 

revenues was twice of OAPEC member countries’ oil revenues during 

the period 1996-2000, and the differential decreased to the amount of 

slightly more than doubled during the period 2003-2007. 

3-5 A Study on "Developments in World Oil Prices and Their 

Impact on The Global Economy" 

The study primarily aims to examine the developments in oil prices 

during the period ( 2000 - April 2009) and their impact on the global 

economy. It has addressed this issue through the following main 

aspects: 

The first part Addressed the developments in commodities prices in 

world markets during the period 2000 - April 2009. While the second 

part provides an analysis of the trend of spot and future oil prices and 

their fluctuations during the same period, and the relationship between 

spot and futures crude oil prices also examined. The third part was 

devoted to study the factors which were behind the rise in oil prices 

during the period 2002 - July 2008, and the factors which led to the 

decline in oil prices since the second half of 2008. 

In an attempt to highlight the interaction of oil prices with the 

circumstances surrounding the oil markets during the period (2000-April 

2009), the fourth part gives the feasible explanations for the 

phenomenon of the rise and fall in oil prices, by focusing on the period 

2004-2008. The fifth part provides a future prospect of the global oil

market, by reviewing market outlook and its potential effects on prices 

trends. The sixth part introduces the implications of the change in oil 

prices on the global economy, a special attention was given to the 

implications of the change in oil prices on OAPEC member countries’ 

oil revenues and on consuming countries and major oil companies. 

3-6 A Study Entitled: "The Development of Natural Gas Market in 

the European Union and its Implications for the Gas Demand 

from OAPEC Member Countries" 

The study is intended to shed light on the evolution of the natural gas 

market in the European Union and the implications for the gas demand 

from OAPEC member countries. 

The first part dedicated for giving an overview of the natural gas 

sector in the European Union. The second part addressed the role of 

imports in natural gas balance in the EU. It was clear that European 

countries suffer from a growing gap between production and consumption 

of natural gas which amounted to 290 billion cubic meters in 2007 

compared with 209.2 billion cubic meters in 2000. This was due to the 

continuing decline in domestic production of gas which led to tremendous 

increase in imports to meet domestic needs. 

The third part touched on the European Union's energy policy 

adopted in the field of natural gas to restructure, regulate and liberalize the 

natural gas markets. The fourth part was devoted to address the 

implications for member countries and prospects of increasing gas supply 

to the European market. It was expected that the energy policy of EU will 

have various implications on gas Demand from OAPEC member 

countries. 

3-7 A Study on "Fertilizers and Petrochemical Industry in the Arab 

Countries: Current status and Future projects" 

The study aimed to shed light on the development in petrochemicals 

and fertilizers industries in Arab countries, which experienced tremendous 

development during the past ten years. It also highlighted the importance 

and the impact of this situation on current and future prospects of the 

global petrochemical industry in terms of quantity and quality of materials 

produced on one hand, and in terms of cooperation and partnerships in the 

field of production technology between Arab countries and major 

production companies and the owners of technology. The study comprised 

the following three chapters: 

The first chapter addresses the most important developments in global 

petrochemical industry which has witnessed a changing in the production of

asic petrochemicals pattern toward the east. It also dealt with the 

developments in global olefins markets, the developments of world 

production and consumption of raw and final materials, future expectations, 

and supply and demand conditions. 

Chapter two outlines the natural resources’ advantages and potentials 

enjoyed by the Arab countries as they encouraged to establish advanced 

petrochemical industries. It also addresses the development of basic and 

final petrochemicals in the Arab countries during the period 2005 - 2009. 

The third chapter reviews the current situation and future projects for the 

petrochemical and fertilizers industries in Arab countries. 

3-8 A Study on "Development of Natural Gas Resources in Arab 

Countries" 

The study divided into three chapters, in addition to the summary and 

conclusion. The first chapter reviews the evolution of natural gas reserves, 

production and consumption in Arab and international levels with reference 

to the evolution of its use in electricity generation and water desalination in 


The second chapter reviews the development of natural gas resources 

and the development of its industry in each of the member countries until 

2007, including the development of reserves, production, consumption, and 

natural gas liquefaction and GTL industries. The study also reviews natural 

gas trade and the existing and under construction local and regional gas 

pipeline. The third chapter deals with the development of natural gas 

resources in non- OAPEC member countries, namely: Jordan, Oman, and 

Yemen. The study came to conclusions that emphasize the need for 

enhancing cooperation and integration among Arab countries in all areas of 

the natural gas industry. 

3-9 A Study on " Arab and Global Oil Refining Industry " 

This study aimed to shed light on the most important features that 

experienced by the oil refining industry and the difficulties encountered in 

the major world regions, with reference to actions taken to enable the 

refineries to adapt to those difficulties. This done in order to draw lessons 

that will enable us to explore the future of refining industry, and help to 

choose appropriate solutions to address the negative implications of the 

current and future challenges and difficulties. The study aimed to answer 

the following questions: 

- What are the main features experienced by world refining industry in the 

past decades, and how it contributed to identify its structure and track

- What are the challenges faced by Arab and world oil refining industry, 

and what are the possible solutions to overcome these challenges and 

reduce their negative repercussions 

- Is it possible to follow an identical policy, which suitable in all 

circumstances and to suit all regions of the world, in order to develop 

refining industry 

- What is the impact of the use of alternative energy sources such as biofuel 

on the future of oil refining industry 

- What are the implications of the economic crisis on proclaimed oil 

refining projects, and how can be faced 

The study was divided into two parts, first part deals with global 

refining industry, and the second part deals with the developments in Arab 

refining industry. 

3-10 A Study on "Improved Petroleum Recovery" 

The study divided into four sections, the first section contained two 

chapters. Chapter one dealt with the important definitions and concepts 

such as primary, secondary, and tertiary production, and classifications of 

reserves. The second chapter discusses the recovery factor and the 

geological factors affecting it. 

Section two included five chapters dealt with the following IOR 

methods: 

- Water flooding, whether treated or carbonated water. 

- Gas injection techniques, which include miscible gas injection, , and 

recycling of gas. 

- Carbon dioxide flooding, acid gases injection, and WAG (wateralternating-gas) 

injection. 

Section two also dealt with the thermal methods from steam injection to 

in situ combustion, the section also included a study of chemical methods 

such as polymers injection, alkaline injection, and surfactants injection. 

Then the bacterial methods were clarified by explaining the mechanism of 

bacteria action, its applications, and standards for using this technique and 

the barriers facing its use. 

Section three comprised three chapters addressed the modern drilling 

techniques, their role in raising the recovery factor and reservoir 

characterization, and reviewed some new technologies that have made their 

way into the oil industry recently.

Section four consists of two chapters, the first one intended to look at 

improved gas recovery technology, where reference was made to carbon 

dioxide injection and water injection technology to raise the recovery factor 

in gas reservoirs. 

The second chapter of this section was devoted to give an overview of 

the economic outlook and its impact on IOR projects. The study was 

enriched with about 60 examples of different applications of improved oil 

recovery methods. 

3-11 A Paper Entitled "Principles of Oil Exploration " 

This paper was submitted to the 20th Forum on the Fundamentals of 

the Oil and Gas Industry convened by the Secretariat at its headquarters in 

the State of Kuwait during the period from 22 to 26 March 2009. The paper 

discussed the following topics: 

- Definition of oil and the necessary conditions for its existence and 

accumulation. This topic addressed the chemical structure and physical 

specifications of oil and gas, hydrocarbons formation in nature, types of 

oil and/or gas traps and necessary geological conditions. 

- Petroleum exploration methods: This chapter addressed geological, 

geophysical and geochemical surveys and their interpretation, in 

addition to how to create mathematical models and merging data to 

select the best site for exploratory wells. It also explored methods of 

drilling and well casing. 

- Exploration work and studies while drilling: This chapter included 

the study of cuttings and samples from wells, methods of obtaining 

them and follow-up of the specifications of drilling fluid. It also 

addressed geophysical measurements in wells ‘logging operations’ and 

their interpretation, in addition to core well testing. This chapter also 

considered the method of estimating the geological reserves of 

discovered fields and reserves classification. 

- Exploration in the Arab world, and Arab and global oil and gas 

reserves: The history of oil exploration in the Arab countries was 

examined in this chapter. It showed proved reserves and accumulative 

production of oil and gas. It gave estimates of undiscovered reserves 

and explained the exploration legislation applied in the Arab countries. 

At the end of the chapter, oil depletion and related questions were 

addressed.

3-12 A Paper Entitled "Production of Oil and Gas" 



the State of Kuwait during the period from 22 to 26 March 2009. The paper 

dealt with the following topics: 

- The history of oil discovery and its global use. 

- Defining the concept of the different stages of evaluating and developing 

commercial discoveries. 

- Drilling methods and their equipments, and types of casing . 

- The methods of completing and stimulating wells to bring them on 

stream. 

- Information on the crude oil gathering stations and the process of 

separating gas and associated water. 

It also addresses petroleum recovery and enhanced oil recovery 

techniques to improve production. These include the primary production: 

expansion of gas initially dissolved in the crude oil, expansion of gas cap 

water drive, and gravity drainage, and an explanation of types of pumps 

used in oil production were given. Then secondary recovery methods were 

mentioned, theses includes the techniques of water injection and gas 

injection and horizontal drilling infill, drilling etc. Some tertiary production 

methods have been clarified such as thermal and chemical methods. 

The paper then reviews the production of natural gas, and presented 

the history of its use, and its role in the energy mix, with reference to 

improve gas recovery techniques. 

A brief overview of oil and gas reserves and production in Arab 

countries during the period 2004-2008, was given, and part of this paper 

was devoted to talk about the production costs, which were divided into 

four elements: finding and exploration cost, the development cost, the 

operating cost (production), and taxes. 

3-13 Paper Entitled ‘The Fundamentals of Refining Industry and 

Production of Clean Fuel’ 



the State of Kuwait during the period from 22 to 26 March 2009. 

The paper dealt with the fundamental principles of oil refining from 

the conversion of crude oil to petroleum derivatives up to the stage when 

they became subject to consumption as fuel in transportation, electricity 

production, and manufacturing of petrochemical products and others. The

paper pointed out the most important challenges and difficulties facing the 

refining industry, such as turmoil in oil prices, the strict environmental 

legislation, and the impacts of clean fuels’ production on the refining 

profitability. 

After reviewing the total number of refineries and their capacities in 

each OAPEC member countries and other Arab countries, the paper 

addressed the strategic plans set by the organizers of the oil refining 

industry at the forefront of their attention to improving the management and 

operation of the refineries. 

These strategic plans aim to improve performance and profitability, 

and to avoid bottlenecks and gaps that may hinder the process of producing 

clean fuels. Theses plans includes the following : application of programs to 

improve energy efficiency and conservation, paying great attention to 

maintenance and operation programs, preparation of an integrated system of 

health, safety and environment, in order to meet the requirements of 

environmental legislation, and the application of new technologies that help 

to develop and improve profitability and productivity. 

In conclusion, the paper pointed out the great renaissance taking place 

in the refining industry in Arab countries through the establishment of new 

refineries or upgrading existing facilities, which will enable them to 

produce petroleum derivatives that compatible with the requirements of 

environmental standards. 

3-14 Paper Entitled "Petrochemicals Industry" 



the State of Kuwait during the period from 22 to 26 March 2009. 

The paper aimed to review the petrochemical industry and its 

importance, and to shed light on current status and future outlook of the 

industry Arab countries in particular and in world as whole. 

It included the stages of manufacturing different petrochemicals, 

including the types and methods of choosing and preparing feedstock, 

production techniques and methods of producing basic, intermediate and 

final petrochemicals. The paper discussed the international and Arab 

developments in the petrochemical industry, including production and 

global demand for petrochemicals, the development of basic petrochemical 

products in the Arab countries, and reviewed the current situation and 

existing industries and future manufacturing projects of fertilizers and 

petrochemicals in Arab countries.

The paper also addressed the environmental impacts resulting from the 

manufacture and use of petrochemical, emissions and contaminated waste 

and their different effects on the atmosphere, water and soil, and tackled the 

methods of controlling and reducing pollution. 

3-15 The Paper Entitled " Natural Gas Industry in OAPEC Member 

Countries" 

The paper presented to the Conference and Exhibition of the Fifth 

International oil and gas industry (Intergas-5), which was held in Cairo 

during the period 12-14 May 2009. 

The paper noted that the gas reserves in the world amounted to 177.1 

trillion cubic meters at the end of 2008, OAPEC member countries 

accounted for 29.4%, equivalent to about 52.1 trillion cubic meter. 

The paper reviewed the role of Arab countries in supplying the global 

market with natural gas, and provided information about the existing 

regional and international gas export pipelines among the Arab countries or 

between them and their neighbors or the one in transit to Europe, and those 

under construction. It also reviewed the natural gas liquefaction industry as 

well as gas-to-liquids (GTL) in OAPEC member countries. The paper 

noted that OAPEC member countries own a huge fleet to export liquefied 

gas reached 34 tankers at the end of 2008 with a total capacity of 4.8 

million cubic meters. 

3-16 A Paper Entitled "Oil Refining Industry in the Arab World: 

Challenges and Opportunities" 

The paper presented to the eighth Syrian-Egyptian Chemical 

Engineering and Petroleum Conference, held during 13-15 October 2009, 

in Homs - Faculty of Chemical and Petroleum Engineering - Syrian Arab 

Republic, in cooperation with the University of the Suez Canal, Arab 

Republic of Egypt. The paper contains the following main aspects: 

- An overview of the oil refining industry in Arab countries, including the 

number of refineries and their capacities in each of OAPEC member and 

other Arab countries. 

- Challenges facing oil refining industry in Arab world, their causes and 

implications. 

- Opportunities for development of the refining industry in the Arab 

countries through the implementation of projects related to develop the 

existing refineries and establishment new ones, and the implications of 

these projects on the future of this industry.

- Difficulties encountered the implementation of development projects in 

Arab refining industry, and how to overcome it. 

The paper concluded by outlining some of the recommendations 

which it could enhance the capacity of Arab oil refining industry to conquer 

the challenges. 

3-17 A Paper Entitled "Oil and Gas Industry in GCC States" 

This paper was presented to the conference and exhibition of small 

and medium-oil industries, which was held in Kuwait, 13-14 December 

2009, and addressed the following main aspects: 

- Proved reserves and production of oil and natural gas in the GCC states. 

- Possibilities for increasing the reserve. 

- Estimates of oil and gas life span. 

- Petroleum refining industry. 

- Gas liquefaction industry. 

- Petrochemical and fertilizer industry. 

- The possibility of cooperation and coordination between the GCC states 

and the role of the private sector. 

- Conclusions. 

The paper noted that GCC region is one of the richest and most 

important oil regions in the world, as GCC states’ oil reserve amounted to 

486 million barrels at the end of 2008, or approximately 41.5% of world 

reserves which estimated at 1164 million barrels. While natural gas reserves 

in GCC states reached 42.2 trillion cubic meters, equivalent to 23.4% of 

total world reserves, which estimated at 171.1 trillion cubic meters. With 

regard to production, the paper noted that the GCC states produced about 

18.2 million barrels per day at the end of 2008, equivalent to 19.2% of 

world total, and about 258.8 billion cubic meters of gas, or about 8.4% of 

world total in 2008. 

The paper illustrated that the GCC states have benefited from this 

wealth, and has established several industries in the area of refining and 

petrochemicals. The paper stressed that the GCC states are aware of the 

importance of their role in the global energy market, as they work to 

increase production capacity to be able to contribute in meeting the 

expected increase in global oil and gas demand. The paper reviewed some 

of the successful experiences in the framework of cooperation in the fields 

of petroleum, and pointed out the role of the private sector in this area.

II. ARAB AND INTERNATIONAL COOPERATION 

1. Seminars and Meetings Organized by the General Secretariat 

1-1 The 20th Forum on the Fundamentals of Oil and Gas Industry 

In accordance with its 2009 working program, the General Secretariat 

held the 20 th Forum on the Fundamentals of the Oil and Gas Industry at its 

headquarters in the building of Arab organizations in Kuwait, from 22 to 26 

March 2009. The Forum was attended by 65 representatives from all 

OAPEC member countries distributed as follows: 

Algeria 5 

Bahrain 3 

Egypt 5 

Iraq 6 

Kuwait 22 

Libya 5 

Saudi Arabia 11 

UAE 2 

OAPEC General Secretariat 2 

Total 65 

The program aims to inform personnel working in middle 

management in the Arab oil industry in OAPEC member countries about 

various aspects of the oil and gas industry so as to help them develop their 

skills and broaden their professional horizons. It does this by examining the 

different phases of the industry, from exploration, production, and refining 

to transportation, as well as touching on the related economic, 

environmental, and media aspects. 

It also presents brief look of the Organization of Arab Petroleum 

Exporting Countries and its sponsored ventures, so much, for the factual 

side of the program. From the social point of view, the program aims to 

provide an opportunity for staff in the Arab petroleum industry to become 

acquainted and form friendships as a step toward cooperation and joint 

action between their countries in this industry. 

The Secretary General opened the program with a welcoming speech 

in which he presented a brief look at OAPEC and its sponsored ventures. 

The program comprised 13 lectures presented by a staff from the 

General Secretariat and elsewhere; they had been selected on the basis of 

their competence in the required subjects.

The lectures covered technical, economic, and media topics, five were 

compiled and presented by specialists from outside the General Secretariat 

and the rest by General Secretariat specialists. 

The trainees were given the opportunity to visit the area of petroleum 

operations in Al-Ahmadi. The visit included an exhibition mounted by 

Kuwait Oil Company, a tour of the area of operations, an oil lake, a 

petroleum gathering center, a producing well-head (Christmas tree), and the 

‘Spirit of the Desert’ project, which demonstrates KOC’s concern with the 

environment. The visit concluded with a lunch kindly arranged by KOC in 

the trainees’ honor. As part of the social activities, the General Secretariat 

organized a visit for the trainees to the Scientific Center in Kuwait so as to 

introduce them to some aspects of development in Kuwait. 

1-2 5th Coordination Meeting for Managers of Arab Petroleum 

Training Institutes in OAPEC Member Countries 

In response to an invitation from OAPEC’s General Secretariat, the 

5th Coordination Meeting for Managers of Petroleum Training Institutes 

was held in Cairo, Egypt, 27-28 May 2009. 

The meeting was attended by 25 specialists as follows: Algeria (1), 

Bahrain (2), Egypt (3), Iraq (4), Kuwait (4), Libya (2), Saudi Arabia (2), 

Syria (3), the Arab Petroleum Training Institute (1), H.E. OAPEC Secretary 

General, Director of OAPEC’s Technical Department, and OAPEC’s 

Director of Public Relations and Services. 

The meeting was opened by H.E. Abbas Ali Naqi, OAPEC Secretary 

General, who welcomed the participants. He stated that the optimum benefit 

of the petroleum training institutes can be achieved by holding regular 

meetings to exchange knowledge and information with the aim of 

strengthening cooperation and knowledge. He directed that coordination 

among the training institutes be through annual meetings and that the host 

country would convene it in coordination with the General Secretariat. 

Managers of the institutes reviewed training activities in their 

countries and the abilities of their institutes as well as their readiness to 

cooperate with other institutes. They proposed suggestions to increase the 

benefits of such meetings. Participants emphasized the need to work to 

achieve some of the goals they had identified. 

Kuwait’s delegation welcomed the convening of the upcoming 

meeting in Kuwait in March 2010 in coordination with the General 

Secretariat. Participants welcomed the invitation and expressed their 

gratitude to the Kuwaiti delegation for taking the initiative.

1-3 16th Coordination Meeting of Environment and Climate Change 

Experts in Member Countries 

The 16th Coordination Meeting of the Environment and Climate 

Change Experts in Member Countries was held in Cairo, 14-15 October 

2009. The meeting was opened by OAPEC Secretary General H.E. Mr. 

Abbas Ali Naqi, who welcomed the participants, and pointed out that the 

Secretariat had been holding these meetings ahead of the annual Conference 

of Parties to the United Nations Framework Convention on Climate Change 

(UNFCCC), which will be held this year in Copenhagen, Denmark, 7-18 

December 2009. He also noted that the meeting aims to discuss issues that 

require coordination among the member countries in order to enable them 

protect their various interests. 

He added that the meeting would focus on following up latest 

developments under UNFCCC and the Kyoto Protocol, as well as 

coordinating positions at international and regional meetings, especially 

Conference of the Parties at its fifteenth session (COP 15), the Conference 

of the Parties Serving as the Meeting of the Parties to the Kyoto Protocol at 

its fifth session (CMP 5), the Ad Hoc Working Group on Long-term 

Cooperative Action under the Convention (AWG-LCA), and the Ad Hoc 

Working Group on Further Commitments for Annex I Parties under the 

Kyoto Protocol (AWG-KP). 

Dr Muhammad Mukhtar Lababidi, Director of Technical Affairs at the 

Secretariat, then reviewed developments relating to the Convention since 

the COP 14 meetings in December 2008, as well as the initial program for 

the forthcoming meetings to be held in Copenhagen, December 2009. 

Delegates from Member Countries had participated in the coordination 

Meeting, as well as delegates from League of Arab States-Technical 

Department of the Council of Arab Ministers responsible for the 

Environment, General Secretariat of the Gulf Cooperation Council (GCC), 

and OPEC. 

The participants discussed the developments related to UNFCCC and 

the Kyoto Protocol and the preparations for the forthcoming meetings in 

Copenhagen in December 2009. Several recommendations on the 

coordinating positions at those meetings were adopted. 

1-4 9th Meeting of Working Group on Potential Cooperation in 

Natural Gas Investment, 17-18 October 2009, Cairo, Egypt 

In implementation of the Secretariat’s 2009 Action Plan and the 

recommendations of the 8th meeting of the Working Group on the

possibility of cooperation in natural gas investment, the 9th meeting of the 

Working Group was held in Cairo, 17-18 October 2009. 

The meeting was attended by 23 experts from OAPEC member countries. 

The meeting was inaugurated by HE Mr. Abbas Ali Naqi, OAPEC 

Secretary General, who welcomed the participants and noted the 

importance of the meeting as it aims to study developments in the natural 

gas industry in the Arab countries and the world during the period between 

the eighth and ninth meetings, as well as any other topics related to this 

industry, in order to examine the possibilities of cooperation between 

member countries in this field. After reviewing General Secretariat’s paper 

about following up on the recommendations of the eighth meeting of the 

Working Group, and actions taken by the Secretariat during the period 

between meetings, and major developments in the natural gas industry in 

member countries. The participants presented working papers on 

developments in the natural gas industry. 

These papers were extensively debated and constructive questions 

were raised. At the end of the meeting, the participants reached some 

conclusions calling for enhanced communication and an exchange of 

information and expertise, and recommended continuing to hold this 

meeting annually. 

2. Conferences, Seminars, and Meetings Attended by General 

Secretariat 

2-1 Meeting of WEC Cleaner Fossil Fuels Systems Committee 

Dubai, 5-6 February 2009 

In response to an invitation by Ms Barbara McKee, Chairman of the 

Cleaner Fossil Fuels Systems Committee (CFFS) of the World Energy 

Council, the General Secretariat took part in a workshop on the 

sustainability of water and energy, held in Dubai, 5 February 2009. 

In addition to the committee members, the workshop was attended by 

experts in energy, the environment and water, as well as representatives 

from the ministries of water and energy of some Arab countries and oil 

companies. Several experts from the US Department of Energy (DOE) also 

took part. 

Dr. Zahra Al Khatib, Shell’s Technology Marketing Manager in the 

UAE, opened the workshop by welcoming the participants. She noted the

importance of rationalizing the use of natural resources, especially water 

and emphasized the need to improve the efficiency of energy consumption 

in light of changing specifications and environmental requirements. She 

also called for improving the efficiency of currently available technology so 

as to minimize the wastage of water and electricity. 

The two key speeches were delivered by Mr. Saeed al- Tayer, 

Managing Director and CEO of Dubai Electricity and Water Authority, and 

Mr. Carl Bauer, Director of the US DOE’s National Energy Technology 

Laboratory. Three roundtables were held on different topics as follows: 

Roundtable 1 was entitled ‘Striking A Balance Between Energy and 

Other Uses of Water: Policies, Strategies and Organizational Frameworks’. 

Roundtable 2 was entitled ‘Techniques of Reducing Impact of Energy 

Consumption on Water: Challenges, Obstacles and Opportunities’. 

Roundtable 3 was entitled ‘Innovations in Water and Energy 

Technology’. 

The General Secretariat also took part in the CFFS Committee 

Meeting, which was held on the sidelines of the workshop on 6 February 

2009. Attendance was restricted to committee members. 

2-2 The 83rd Meeting of the Economic and Social Council 

Cairo - 8 -10 February 2009 

The General Secretariat of OAPEC participated, as an observer, in the 

83rd meeting of the Ordinary Session of the Arab League’s Economic and 

Social Council, held at the Arab League headquarters, on 8-10 February 

2009, on permanent delegates' level. Delegates representing all Arab 

countries except Somalia attended the meeting, as well as representatives 

from 19 other Arab Organizations and Institutions. 

The Council’s agenda comprised 10 items, among which was the 

developments of the Greater Arab Free Trade Area (GAFTA), and the 

amendment of some organization’s and institution’s statues, related to the 

activities of the Economic and Social Council. The other items were as 

follows: 

1- The Arab League Secretary General’s Report. 

2- Economic and social digest of the Council on the summit at its twentyfirst 

session. 

3- Follow-up the preparation for Arab Economic and Social Development 

summit.

4- Amendment of the Arab Investment Court Statute. 

5- The impact of high world food prices on the standard of living of Arab 

citizens. 

6- The establishment of the Japan-Arab Economic Forum 

2-3 Meeting on Arab Strategy for Using New and Renewable Energy 

Cairo, 14-16 April 2009 

In response to an invitation by the Arab League’s Secretariat General 

(Economic Affairs Section, Energy Department), the General Secretariat 

took part in a meeting in Cairo, 14-16 April 2009, to discuss the final draft 

of the Arab Strategy for Using New and Renewable Energy. 

The meeting was held in accordance with the recommendations of the 

29th meeting of experts from the Arab countries represented on the 

Executive Bureau of the Council of Arab Ministers Responsible for 

Electricity, held in Cairo, 14-15 October 2008. 

The recommendations called for the formation of a working group of 

Arab countries represented on the Executive Bureau and related Arab and 

regional bodies in order to study the strategy’s draft and make the necessary 

amendments. 

The General Secretariat made a number of remarks on the initial draft 

of the strategy, issued in October 2008. In light of the remarks on the 

strategy, the meeting concluded that the document was only a study of the 

current status and recommended the adoption of a new method to prepare 

the strategy project. The new method includes the completion of related 

data from the Arab countries and formation of a working group of experts 

from the Arab countries and certain Arab and regional organizations. The 

expert team will prepare a report on the subjects based on a comprehensive 

Arab perspective in preparation for the strategy. 

2-4 Meeting of the Higher Coordination Committee for Joint Arab 

Action 

The General Secretariat participated as an observer in the 40 th session 

of the Higher Coordination Committee on Joint Arab Action, held at the 

headquarters of the Arab League’s Secretariat General, 4-6 May 2009. 

The meeting was headed by H.E Amr Moussa, Secretary General of 

the Arab League. Representatives from 21 Arab organizations and 

institutions attended the meeting. Among other things the meeting

discussed a report on the implementation of the 39th session’s 

recommendations, which were as follows: 

- Procedures taken by the Secretariat General and specialized Arab 

organizations with regard to following up implementation of the 

Economic and Social Council’s resolution on standardizing the systems 

of specialized Arab organizations. 

- Cooperation between the Arab League and its specialized organizations 

and the UN and its specialized agencies. 

- Procedures taken by the Arab League’s Secretariat General and 

specialized Arab organizations to follow up the implementation of 

resolutions adopted by the Arab Economic and Social Development 

Summit. 

- Recommendations of the civil society organizations meeting. 

2-5 The Arab Electricity Experts Meeting 

Cairo, 17-21 May 2009 

In response to an invitation by the Arab League’s Secretariat General 

(Energy Department— Secretariat General of the Council of Arabs 

Ministers Responsible for Electricity), OAPEC’s General Secretariat took 

part in the meetings of experts, members of the Executive Bureau and the 

Council of Arab Ministers Responsible for Electricity, which were held at 

the headquarters of the Arab League’s Secretariat General, 17-21 May 

2009. 

The meetings were attended by experts from the Arab countries 

represented on the Executive Bureau, the chair and members of the 

Executive Bureau, and the ministers. Representatives came from Algeria, 

Bahrain, Egypt, Jordan, Libya, Qatar, Saudi Arabia (as an observer), Syria, 

the UAE, the Arab Industrial Development and Mining Organization, the 

Arab Atomic Energy Agency, OAPEC, the GCC Interconnection Authority, 

ESCWA and the General Secretariat of Interconnection Project. 

The meetings addressed a number of topics, including following up 

the resolutions of the Arab Economic, Social and Development Summit, 

Arab electricity interconnection, renewable energy, improving energy 

efficiency, peaceful uses of nuclear power, scientific symposiums of the 

Council and cooperation with countries and regional and international 

organizations and blocs.

2-6 Committee Meeting for Institutions Involved in Preparation of the 

Joint Arab Economic Report, 2009 

The Arab institutions taking part in compiling the Joint Arab 

Economic Report, 2009, met at the headquarters of the Arab Monetary 

Fund in Abu Dhabi, the UAE, from 21 to 23 June 2009. Representatives 

attended from the Arab League, the Arab Monetary Fund, the Arab Fund 

for Economic and Social Development, and the Organization of Arab 

Petroleum Exporting Countries. 

The meeting dealt with several topics including statistical aspects of 

the report and reviewing in detail the initial drafts of the chapters that had 

been circulated to the participating institutions in preparation for an initial 

version that would be circulated on a limited basis to the participating 

institutions, the Economic and Social Council, the Council of Central Bank 

Governors, and Arab monetary institutions. 

It was agreed that a preparatory meeting for the 2010 report 

would be held 21-23 December 2009 at the Arab League headquarters in 

Cairo, Egypt. 

2-7 The 84 th Meeting of the Economic and Social Council 

The General Secretariat took part as an observer in the meetings of the 

Economic and Social Council at its 84th ordinary session at the level of 

permanent envoys and senior officials, which was held in Cairo, Egypt, 

30th of August to 1st of September 2009. 

The meeting was attended by delegations from all Arab countries, 

except Somalia, and representatives from 18 Arab and regional 

organizations and institutions. The meeting’s agenda included 9 themes, 

most important was the ‘Developments of the Greater Arab Free Trade 

Area (GAFTA)’. Other topics were as follows: 

1- The Arab League Secretary General’s Report. 

2- Follow-up the preparation for Arab Economic and Social Development 

summit. 

3- Facilitating trade and transport. 

4- Periodic economic issues. 

2-8 4 th Meeting of the Energy Statistics Committee 

In response to an invitation by the International Energy Agency, the 

General Secretariat participated in the 4th Meeting of the Committee on 

Energy Statistics, which was held at the headquarters of the International 

Energy Agency in Paris, 22-23 October 2009.

The meeting aimed primarily to make a final review of the definitions 

and concepts for products and flows in the light of comments made by 

energy organizations on these concepts earlier, as well as ways of 

increasing coordination among organizations in this field. The General 

Secretariat had participated in various meetings of the Committee on 

Energy Statistics. 

Representatives of twenty organizations and institutions working in 

the field of energy and statistics took part in the meeting, which addressed 

three main areas: 

1. Reviewing developments since the first meeting held in November 

2005 regarding improvement of energy data from primary and 

secondary sources, as well as the bases for strengthening cooperation 

among the participating organizations and means of coordination 

among them. 

2. Reviewing stages of the process of standardizing definitions, terms 

and concepts related to products such as oil and natural gas, coal, 

renewable energy and the various offshoots and flows such as 

production, supply, consumption, exports, imports, stocks and the 

various offshoots. 

3. Final discussion of the final report prepared by the firm of 

consultants, which included all the definitions and concepts related 

to energy in the light of remarks by the energy organizations on the 

one hand, and on the other making the necessary modifications in 

accordance with the meeting’s deliberations. 

2-9 Conference on Arab-Sino Cooperation in Energy 

In response to invitation by Arab League General Secretariat 

(Department of Energy), OAPEC participated in the Arab Coordination 

Meeting on the preparations for the Second Conference of Arab-Chinese 

cooperation in the energy field. The meeting was held at the headquarters of 

Arab League in Cairo, 9 - 10 December 2009. 

Representatives of the Department of Energy, Department of Asia and 

Australia, and Department of Studies and Arab-strategic relations in the 

Arab League participated in the meeting. Representatives from the Ministry 

of Energy and Mining in Republic of Sudan, where the conference will be 

held, also participated in the meeting. The meeting also attended by 

ministries, institutions and agencies concerned with energy in the Arab 

Republic of Egypt, and representatives of the Kingdom of Morocco and the

Republic of Djibouti, in addition to the Arab Atomic Energy Agency and 

the Organization of Arab Petroleum Exporting Countries (OAPEC). 

The Objective of the meeting was to discuss the final arrangements for 

the Second Conference on Arab-Chinese cooperation in energy, to be held 

in Khartoum in the Republic of Sudan, 26-28 January 2010. The meeting 

also aimed to discuss the following: 

- Outlines of working papers to be presented at the conference. 

- The proposed mechanism of cooperation between the two sides(Arab and 

Chinese). 

- The final draft of the Conference’s communiqué. 

2-10 Preparatory Meeting on Compiling the Joint Arab Economic 

Report, 2010 

The General Secretariat took part in a preparatory meeting on 

compiling the Joint Arab Economic Report, 2010, which was held at the 

Arab League in Cairo, 21-23 December 2009. 

The meeting was attended by representatives of the Arab League, the 

Arab Monetary Fund, and the Arab Fund for Economic and Social 

Development. The participants discussed the Joint Arab Economic Report, 

2009 and the comments on it made by Arab countries. They also considered 

the 2010 report and the chapters it would contain. 

It was agreed that the key chapter of the 2010 report would be on 

‘Repercussions of the global economic crisis for the Arab economies,’ and 

that other chapters would be linked to this topic as far as possible. The 

timetable for compiling the 2010 report was agreed. Initial drafts of the 

report’s chapters will be exchanged on 30 th of May 2010 and discussed at 

the AMF headquarters between 20 th and 24 th June 2010. An initial draft of 

the report will be compiled on 1 st of August 2010. 

2-11 2nd Kuwait Waste Management Conference and Exhibition 

The General Secretariat took part in the 2 nd Kuwait Waste 

Management Conference and Exhibition,14 -16 April 2009 held at the 

Radisson SAS Hotel - Kuwait, The event was organized by Promedia 

International Under the patronage of HE Dr. Fadel Safar the Minister of 

Works and Minister of State for Municipal Affairs in Kuwait. 

Events included 11 Sessions dealt with and discussed many of the 

technical, scientific papers and case studies of various topics: 

- The modern concept of waste management.

- Reduction and the safe disposal of waste and recycling programs in some 


- Reviewed the UNEP Role in Promoting Environmental Sound 

Management of E-Waste. 

In addition to Health, Industrial Household Waste, Landfills 

techniques, Methods of plastic waste treatment in Europe, and studying the 

impact of the oil industry in some oil-producing countries. 

2-12 The Second Middle Eastern and North African Carbon Forum 

In response to an invitation by the World Bank Carbon Finance-Assist 

Program, the General Secretariat took part in the 2nd Middle Eastern and 

North African Carbon Forum, held in Cairo in association with the 

Egyptian Environmental Affairs Agency (EEAA), the World Bank Carbon 

Finance-Assist Program, and the French Agence Française de 

Développement (AFD), 6-7 May 2009. 

Representatives from Algeria, Jordan, Lebanon, Morocco, Kuwait, 

Qatar, Saudi Arabia, Tunisia, the UAE and Yemen took part in the forum’s 

activities. The forum was attended by a number of energy and environment 

experts and representatives from regional and international organizations, in 

addition to private consultancies. 

The World Bank carried out a study to evaluate and analyze the 

potential market of clean development, focusing on the role played by the 

energy sector in the Middle East and North Africa. It was emphasized at the 

forum that building potential and developing administrative institutions are 

still a top priority for the Middle East and North Africa countries in order to 

maximize the number of projects in different sectors and encourage 

investments in the Clean Development Mechanism (CDM). 

The sessions, which lasted two days, addressed some methods for 

increasing carbon financing in the development policy sector and issues of 

sustainable development in the countries of the Middle East and North 

Africa. Discussions were held on the role of the oil and gas industry and 

procedures taken to reduce greenhouse gas emissions. Light was shed on 

different methods by which other sectors can help in cutting emissions, 

including the expertise already available in the region. 

The General Secretariat submitted a paper on some activities pursued 

by OAPEC member countries to reduce gas emissions and the involvement 

of Arab countries in CDM projects, which account for no more than 2% of 

the projects submitted by developing countries.

2-13 5 th International Conference and Exhibition for Oil and Gas 

In response to an invitation by the conference organizers, the General 

Secretariat took part in the 5th Oil, Gas and Petrochemical Conference 

(Inter Gas V), held at the Cairo International Convention and Exhibition 

Centre, 12-14 May 2009. 

The conference was opened by H.E Sameh Fahmy, Minister of 

Petroleum. It was attended by a large number of experts and specialists 

from Arab and foreign countries and over 400 Egyptian, Arab and 

international oil and gas companies. 

The conference aimed to shed light on opportunities for investment in 

energy in Egypt, in light of the promising reserves and political stability. It 

also aimed to highlight the role of international oil and gas companies in 

Egypt’s energy sector and draw attention to the latest techniques in oil and 

gas exploration. 

The conference discussed the natural gas industry in the Arab 

countries and its use and existing projects in Egypt. It also discussed the 

impact of the international financial crisis on financing oil, gas and 

petrochemical projects in Egypt and worldwide, in addition to the latest 

regional and international developments. 

The General Secretariat submitted a major paper on the gas industry in 

OAPEC member countries. 

2-14 15 th Meeting of the Climate Change Subcommittee 

The General Secretariat took part in the 15th meeting of the Climate 

Change Subcommittee, which was held at the Arab League headquarters in 

Cairo, 12-16 July 2009. The meeting was attended by delegations from 

Arab countries and international and regional organizations. 

The Committee discussed its draft agenda of the meeting and was 

adopted as follows: 

- Item I: The Arab preparation for the Third World Climate Conference 

(WCC-3) which will be held under the auspices of the World 

Meteorological Organization (Geneva 31/8-4/9/3009). 

- Item II: The Arab preparation for the Intergovernmental Panel on Climate 

Change meetings, and developing a vision for the fifth assessment report. 

- Item III: The Arab preparation for the fifteenth session of the Conference 

of the Parties (COP-15) to the United Nations Framework Convention on 

Climate Change (UNFCCC) and the fifth session of the Conference of

the Parties serving as the Meeting of the Parties to the Kyoto Protocol 

(CMP 5) (Copenhagen: 7-18/12/2009). 

- Item IV: Review the researches and scientific studies conducted in the 

Arab countries related to climate science and the implications of its 

change and the adopted measures. 

2-15 GCC conference on investment on oil, gas, and petrochemical 

industries during the World Financial Crisis 

In response to an invitation by the organizers , the General Secretariat 

participated in the first GCC conference on: "Investments in Oil, Gas and 

Petrochemicals during the World Financial Crisis", which was held under 

the patronage of HE Dr / Abdul Hussain bin Ali Mirza, Minister of Oil and 

Gas Affairs and Chairman of the National Oil and Gas Authority in 

Kingdom of Bahrain, who opened the conference in Manama, 20 - 21 

October 2009. 

Conference was attended by a large number of oil companies, 

financial institutions. Many papers presented in the conference, their 

outcome highlighted that GCC region, with its natural resources and 

financial facilities. In addition to its stability, GCC creates an appropriate 

and safe environment to invest in petroleum and petrochemical industries. 

The papers also reviewed a number of projects in the region, the investment 

needs, and ways to secure it. 

2-16 International Petroleum Technologies Conference (IPTC) 

In response to an invitation from the organizers, principally Qatar 

Petroleum Company and the Oil Engineers Association, the General 

Secretariat of the Organization of Arab Petroleum Exporting Countries (one 

of the sponsors of the conference) attended the IPTC 2009, which was held 

in Doha, Qatar, 7-9 December 2009, under the patronage of H.H. the Amir 

of Qatar, Sheikh Hamad bin Khalifa Al Thani. 

About 400 papers were presented at the Conference’s eight parallel 

sessions, on the following topics: 

- Drilling and completion of wells 

- Development and production 

- Reservoir engineering. 

- Geological sciences. 

- Unconventional sources. 

- Gas affairs.

- Integrated techniques. 

- Other topics of interest to the oil industry. 

A large number of specialists attended the Conference from Arab and 

non-Arab countries. Several Arab and international companies took part in 

an accompanying exhibition on petroleum industries. 

2-17 5th Workshop of the International Lithosphere Program (ILP) 

In response to an invitation by the UAE Ministry of Energy, OAPEC’s 

General Secretariat took part in the 5th Workshop of the International 

Lithosphere Program (ILP) Task Force on Sedimentary Basins, which was 

held in Abu Dhabi, 6-11 December 2009. Some 45 working papers were 

discussed at the workshop on methods of recognizing sedimentary basins in 

the Arabian Peninsula in particular, and the Middle East in general. 

Some examples from other parts of the world were also given, in 

addition to 20 posters tackling geological subjects from various world 

regions. The workshop was attended by about 150 experts, representing 25 

countries, including 50 from the UAE, 60 from the Middle East countries 

and 10 from universities and institutes specialized in Earth sciences. 

The workshop activities also included two field visits, one of them 

prior to the workshop where the participants visited Hafeet mountain in Al- 

Ain City, and the other visit, following discussions of the scientific papers, 

took the participants to Daba region famous for its complex volcanic rocks. 

2-18 Small and Medium-Sized Oil Industries Conference and 

Exhibition 

OAPEC’s General Secretariat took part in the Small and Medium- 

Sized Industries Conference and Exhibition, which was held in Kuwait, 11- 

15 December 2009, under the patronage of HE the Minister of Oil and the 

Minister of Information, Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah, 

who inaugurated the conference. 

The Conference was organized by Warah Global Consultancy, with 

support from the Kuwait Petroleum Corporation, the Petrochemical 

Industries Company, Equate and other relevant companies. Some 19 papers 

relating to the Conference theme were submitted, including the one 

presented by the Secretariat representative entitled “Oil and gas industry in 

the Gulf Cooperation Council states.” The paper addressed the following 

topics:

- Oil and natural gas reserves and production in the GCC states. 

- Potential for increasing reserves. 

- Estimates of oil and gas life span. 

- Petroleum refining industry. 

- Gas liquefaction industry. 

- Petrochemical and fertilizer industries 

- Opportunities for cooperation and coordination between GCC states and 

the role of the private sector. 

- Conclusions. 

2-19 Conference of the Parties (COP-15) at its fifteenth session and 

Conference of the Parties serving as the meeting of the Parties to 

the Kyoto Protocol at its fifth session (CMP-5) 

The General Secretariat took part in the Conference of the parties to 

the United Nations Framework Convention on Climate Change at its 15 th 

session (COP-15), and the Conference of the Parties serving as the meeting 

of the Parties to the Kyoto Protocol at its 5th session (CMP-5). It also 

participated at the 8 th session of the Ad Hoc Working Group on Long-term 

Cooperative Action under the Convention (AWG-LCA), the 10th session of 

the Ad Hoc Working Group on Further Commitments for Annex I Parties 

under the Kyoto Protocol (AWG-KP), and the 31 st session of the Subsidiary 

Body for Implementation (SBI), the Subsidiary Body for Scientific and 

Technological Advice (SBSTA), in Copenhagen, Denmark, 7-18 December 

2009. 

OAPEC Secretary General H.E. Mr Abbas Ali Naqi, attended the 

High-level Segment for Ministers and Head of delegations, which held 

during the period 16-18 December 2009. About 40000 representatives from 

192 countries attended the conference, as well as delegates from 

intergovernmental organizations, NGOs, and media agencies. 

Around 115 Head of States and Prime Ministers had participated at 

this important conference, that represents a high priority for developed and 

developing Countries, and due to its importance in implementing Bali 

Action Plan, and reach a fair equitable agreement on Climate Change. 

However, the tough negotiations and informal consultation between Parties 

during the whole period of the conference resulted without adopting the 

Copenhagen Accord as a decision under the Parties, whereby the Cop15 

“takes note” of the Copenhagen Accord, which did not quantify binding 

reduction targets. 

According to the Copenhagen Accord, developed countries will 

provide adequate funding approaching US$30 billion dollars for the period 

2010-2012 with balanced allocation between adaption and mitigation, and

mobilizing jointly US$100 billion dollars annually by 2020, to address the 

needs of developing countries. 

The agreement has been strongly opposed by Venezuela, Bolivia, 

Nicaragua and Sudan. The sixteenth session of the Conference of the 

Parties (COP-16) and the sixth session of the Conference of the Parties 

serving as the meeting of the Parties to the Kyoto Protocol (CMP-6) will be 

held in Mexico from 29 November to 10 December 2010. 

III. ENERGY RESOURCES MONITOR-ARAB 

AND INTERNATIONAL 

In 2009 the General Secretariat continued to publish its quarterly 

bulletin entitled Energy Resources Monitor-Arab and International. The 

bulletin covers developments in oil and gas exploration activities in 

OAPEC and non-OAPEC Arab countries, as well as other countries. It 

highlights new technologies based on data published in Arab and 

international periodicals. 

IV. The Promotion of Scientific Reaserch 

OAPEC Award for Scientific Research 2008 

In accordance with the Executive Bureau decision relating to 

granting the awards for scientific research, OAPEC’s Ministerial Council 

honored the winners of the 2008 OAPEC Award and presented them with 

certificates at its meeting in Cairo on 5 December 2009. The research 

topic was ‘Carbon Dioxide Capture and Storage.’ 

OAPEC Award for Scientific Research 2010 

Pursuant to the provisions of OAPEC Award for Scientific Research 

by granting two awards every two years (the value of first prize 7000 KD) 

and the second prize (KD 5000)), the research topic for the OAPEC 

Scientific Award for the year 2010 was selected as "Results of New 

Technologies Application in Petroleum Exploration and Production in 

Arab Countries, And Its Economics." 

The General Secretariat announced the research topic selected for 

OAPEC Award for Scientific Research 2008. The announcement was 

published in OAPEC’s Monthly Bulletin, OAPEC’s Journal "Oil and Arab

Cooperation" and other collaborating periodicals. It also posted the 

announcement on OAPEC’s website and circulated to member countries, 

research centers, and universities. The deadline for submissions was 31 

May 2010. 

1. Media Activities 

V. SUPPORTING ACTIVITIES 

The General Secretariat continued its media activities in the following 

areas: 

1-1 Editing, Printing, Publishing, and Distribution 

The General Secretariat continued to publish OAPEC’s books and 

periodicals. This involved editing, proofreading, translation, design, 

printing, publishing, and distribution. Table (5-1) lists the books and 

periodicals published by the General Secretariat and the number of copies 

printed and distributed in 2009. 

1-2 Press and Media 

The General Secretariat issued several press releases on the 

Organization’s activities, such as meetings of the Ministerial Council and 

Executive Bureau. Some local and Arab newspapers published articles on 

the Organization’s activities and its role in coordinating the work of 

member countries and promoting joint Arab action according to Arab and 

international circumstances and developments. Moreover, the General 

Secretariat continued to monitor what local, Arab, and international 

newspapers publish on energy affairs and to archive important news and 

features on oil, economics, the environment, and other topics of general 

interest to member countries. 

1-3 34th Arab Book Fair 

The General Secretariat participated in the 34 th Arab Book Fair, which 

was held in Kuwait, 28 October -7 November 2009, sponsored by the 

General Secretariat of Kuwait’s National Council for Culture, Arts, and 

Letters. 

Some 618 publishing houses from 13 Arab and 10 non-Arab countries 

took part in the fair, in addition to number of Arab organizations. They

included the Arab Center for Educational Research in the Gulf States 

(Kuwait), the Arabization Center for Medical Science, the Arab League, the 

Organization of Arab Petroleum Exporting Countries, Arab Book 

Federation (Syria), the Secretariat General of the Gulf Cooperation Council 

(Saudi Arabia), and the Arab Organization for administrative development, 

the Arab League. 

2. Administrative and Financial Activities 

2-1 Evolution of the Administrative Structure 

At the end of 2009 there were 55 employees at the General 

Secretariat, of whom 23 were professional staff and 32 general staff. 

Table (5-2) shows the number of staff at the General Secretariat in the 

period 1968-2009. 

2-2 Evolution of Actual Expenditure 

The General Secretariat’s expenditure in 2009 totaled KD1,803,000. 1 

Table (5-3) shows the evolution of the General Secretariat’s actual 

expenditure in 1968-2009. 

1 Estimated until the final accounts for 2008 are ratified at the end of May 2009.

TABLES OF CHAPTER TWO 

PART TWO

Table 5-1 

Publications Issued and Distributed by 

the General Secretariat in 2004 

Title of Publications 

No.of 

Editions 

No.of 

Copies 

Total 

Copies 

Printed 

Copies 

Distributed 

Total 

Copies 

Distributed 

Periodicals 

- OAPEC Secretary General’s Annual Report 2008 (Arabic) 1 800 800 790 790 

- OAPEC Secretary General’s Annual Report 2003 (English) 1 800 800 750 750 

- OAPEC Annual Statistical Report 2009 1 300 300 200 200 

- OAPEC Monthly Bulletin 

Arabic (1-12) 11 1200 13200 13000 13000 

- Oil and Arab Cooperation; issues (108-111) 4 700 3000 550 2000 

- Energy Resources Monitor - Arabic and International 4 300 1200 270 1080

Table 5-2 

General Secretariat Employees, 1968-2009 

Year Professional Staff General Staff Total 

1968 4 7 11 

1969 10 14 24 

1970 12 22 34 

1971 10 23 33 

1972 9 24 33 

1973 11 23 34 

1974 15 33 48 

1975 31 48 79 

1976 37 58 95 

1977 40 70 110 

1978 41 71 112 

1979 45 79 124 

1980 51 81 132 

1981 47 87 134 

1982 44 90 134 

1983 51 88 139 

1984 49 86 135 

1985 50 82 132 

1986 43 75 118 

1987 24 51 75 

1988 18 43 61 

1989 23 39 62 

1990 23 41 64 

1991 22 39 61 

1992 21 36 57 

1993 22 33 55 

1994 21 28 49 

1995 21 29 50 

1996 21 30 51 

1997 19 32 51 

1998 20 30 50 

1999 17 36 53 

2000 22 29 51 

2001 21 31 52 

2002 21 32 53 

2003 23 29 52 

2004 20 29 49 

2005 22 29 51 

2006 20 31 51 

2007 22 31 53 

2008 24 32 56 

2009 23 32 55

Table 5-3 

General Secretariat Actual Expenditure by Budget Category, 

1968-2009 

(Thousand Kuwaiti dinars) 

Year 

Wages & 

Salaries 

General 

Expenditure 

Studies, Training & 

Information 

Total 

1968 9 18 - 27 

1969 67 52 18 137 

1970 97 75 55 227 

1971 107 50 25 182 

1972 126 63 17 206 

1973 108 66 230 404 

1974 152 140 50 342 

1975 343 335 81 759 

1976 525 306 434 1265 

1977 694 329 367 1390 

1978 807 335 467 1609 

1979 929 401 432 1762 

1980 1133 415 437 1985 

1981 1277 461 559 2297 

1982 1546 527 588 2661 

1983 1763 547 634 2944 

1984 1812 515 508 2835 

1985 1818 447 422 2687 

1986 1697 413 286 2396 

1987 1439 385 190 2014 

1988 799 244 122 1165 

1989 733 242 145 1120 

1990 771 250 141 1162 

1991 693 276 87 1056 

1992 734 322 114 1170 

1993 765 327 118 1210 

1994 718 282 127 1127 

1995 709 380 140 1229 

1996 725 370 140 1235 

1997 725 374 148 1247 

1998 735 385 140 1260 

1999 712 397 127 1236 

2000 799 394 138 1331 

2001 886 384 141 1411 

2002 885 383 146 1414 

2003 874 394 154 1422 

2004 762 386 147 1295 

2005 928 396 148 1472 

2006 837 402 206 1445 

2007 1007 437 183 1627 

2008 1046 482 196 1724 

2009 1048 518 237 1803 

Total 34,340 13,905 9,045 57,290

CHAPTER THREE 

OAPEC-SPONSORED VENTURES 

In 2009, OAPEC-Sponsored Ventures made every effort to take 

advantage of the available opportunities in order to develop and improve 

their performance and fulfill their assigned objectives. This despite the 

impacts of the global financial crisis, which erupted in the fall of 2008 and 

the continued geopolitical tensions particularly in the Middle East and 

North Africa. There were also other challenges that faced by the OAPEC’s 

sponsored ventures due to the nature of their activities, such as competition 

from major international companies with similar activity, and the difficulty 

of entry into the Arab markets. 

However these challenges made OAPEC sponsored ventures more 

determined to confront those obstacles to achieving their goals by relying 

on their expertise and experience gained over the past years. 

In addition to the difficult investment climate, and the volatility of oil 

price, most Arab oil exporting countries, achieved sustained economic 

growth over the years. This has been reflected positively on the OAPEC- 

Sponsored Ventures, as they worked hard to promote their activities and 

establish themselves in areas that fall within their disciplines, namely: 

investment in the case of the Arab Petroleum Investments Corporation 

APICORP; maritime oil transport in the case of the Arab Maritime 

Petroleum Transport Company (AMPTC); and in shipbuilding and repair as 

in case of the Arab Shipbuilding and Repair Yard (ASRY); and in drilling 

and geophysical exploration as in the case of the Arab Petroleum services 

company (APSCO) and its affiliates. 

Most of the OAPEC-Sponsored Ventures were able to achieve 

favorable financial results during the first half of 2009. This was aided by 

cooperation and coordination among these ventures in the completion of 

projects via the provision of financial and technical support.

It should be emphasized here, that all OAPEC-Sponsored Ventures 

enjoy complete independence, and their general assemblies and boards of 

directors are responsible for making decisions on their development plans. 

The activities of each venture are summarized below: 

MARITIME PETROLEUM TRANSPORT 

COMPANY (AMPTC) 

The Arab Maritime Petroleum Transport Company (AMPTC) was 

established in State of Kuwait on 6 May 1972 and commenced its activities 

on January 1973, with an authorized capital of US$200 million and paid-up 

capital of US$150 million . 

The shareholding in AMPTC are all member countries except of 

Syrian Arab Republic, and the objectives of the company are to own, 

operate and charter a fleet of crude oil and oil products tankers. 

The general committee issued its resolution 39/3 in 27 th of June 2008 

regarding the increase of shareholders to an authorized capital of US$250 

million, distributed according to the share of each member countries in 

AMPTC’s capital. 

The Activities of AMPTC in 2008 

In 2008, the freight rates of oil and petroleum products tankers and 

liquefied natural gas carriers - of different types and sizes – witnessed a 

wave of volatility. The fall in freight rates were more pronounced than their 

rise, and there were multiple and interlinked causes that led to that 

volatility. 

AMPTC has adopted policies which permit the company to charter its 

tankers through time charter and voyage charters with major companies in 

order to benefit from the temporary rise in chartering prices and to 

minimize market risks. Avoiding prolonging periods of leasing also helped 

the company to seize the opportunities that were emerging during the boom. 

There is no doubt that this policy has stemmed from the cautious 

company's eagerness to apply the balanced policy under which the 

Governing Council has always adopted, in terms of allocation of risk. This 

was reflected on the financial results achieved in terms of operating profits 

with a doubling of the market value of the company tankers. Thus, the

company has continued to implement additional projects without 

speculation or risk which led to additional profits on an ongoing basis of 

these activities. 

On the other hand, it should be noted AMPTC continued to implement 

the medium-term policies and plans of the Governing Council through the 

replacement by fleet units in the appropriate timing to take advantage of 

high market sale prices, and to work continuously to reduce the average 

ages of operating carriers to avoid problems of aging. As a result of this 

policy, four new tankers have been received in the last quarter of 2008. A 

liquefied natural gas tankers «Al Khaleej Gas», and «Ocean Gas» with 

capacity of 82 thousand cubic meters each. And two tankers for clean 

petroleum products, «bright» and «C Legend» with a capacity of 112 

thousand metric tons each. 

In the first half of 2008, the freight rates, as well as the charter rates of 

all kinds of carriers, witnessed successive rises led to achieve operating 

profit for ship owners. This recovery has continued until the middle of the 

third quarter of the year, when signs of the global economic crisis began to 

cast its shadow over global markets. 

Throughout this period, the company, as always, stuck to its 

operational policy, by avoiding being misled by temporary increases in the 

charter rates. AMPTC has worked to benefit from these increases in charter 

rates by leasing most of its tankers (6 out of 11 tankers) on term contract for 

a period of 3 years and with good and reasonable prices. 

By the fourth quarter of 2008 when the financial crisis continued to 

sweep the whole world economies, the resolutions adopted by the Board of 

Directors proved to be correct, as they kept the fleet away from landslides 

charter prices which fell sharply to their lowest levels. 

As we pointed out above, the company completed its program and 

received its four new tankers. During 2008 and the first half of 2009, the 

company also continued its cooperation in transport and supply of gas 

activities to and from the member countries. AMPTC has renewed its 

contracts with Saudi Aramco and Algerian Sonatrach, to transport the 

Algerian crude to their customers scattered across the world. The company 

was able to conclude new contracts with the Kuwait Petroleum Corporation 

and the Qatar Petroleum Marketing Company (Tasweek). The company 

also makes commercial posts with marketing institutions in member 

countries in line with its conservative policies.

Despite the extraordinary efforts taken by AMPTC in implementation 

of contracts with some member countries with competitive prices far below 

those paid to former gas suppliers and dealers, the company was facing 

many difficulties in the execution of these contracts. 

In addition to the positive side the company faces many difficulties 

resulting from the failure of some other companies commitment to 

implement what has been contracted, which caused the company to suffer 

significant financial losses. 

The company tried several times to overcome these difficulties, by 

making the necessary sacrifice and giving up or making alterations in some 

important terms in contracts, but that has not led to any good results. 

AMPTC affirms that the principle of preference to be given by the 

joint ventures is the foundation and the principle followed by the company 

since its inception. 

The Company's Financial Results for 2008 

In 2008, the company was able to achieve net profit amounted to $30 

million, the actual income generated from vessels rental reached $ 79.24 

million, while the operating cost of the tankers (without depreciation) was 

$ 30.16 million. The depreciation of the tankers amounted to $13,60 

million. 

With regard to gas supply and import projects, AMPTC achieved net 

profit amounted to $5.72 million. The final result of the company’s activity 

was $32.75 million as shown in the financial results issued in 31st of 

December 2009. 

Financial Results for the First Half of 2009 

During the first half of 2009, the revenues generated from vessels 

rental reached $ 44.29 million, while the operating cost of the tankers was 

$ 20.45 million. The depreciation of the tankers amounted to $12.23 

million. Gas projects generated net surplus of $1.14 million. By adding 

returns of deposits and current accounts in banks, financial results of the 

company for the first half of 2009 show a net profit of $5.68 million. 

II. THE ARAB SHIPBUILDING AND REPAIR 

YARD COMPANY (ASRY) 

The Arab Shipbuilding and Repair Yard (ASRY) was established on 

8 th December 1973 with a fully paid-up capital of US$340 million (issued

and paid-up capital amounted to US$170 million). The objectives of ASRY 

cover building, repair and maintenance of all types of ships including 

tankers and other marine transport vessels that are related to the shipping of 

hydrocarbons. The headquarters of the company was located at Al- 

Manama, Kingdom of Bahrain with, Republic of Iraq, State of Kuwait, 

Great Socialist People’s Libyan Arab Jamahiriya, Kingdom of Bahrain, 

State of Qatar, Kingdom of Saudi Arabia, and United Arab Emirates as 

shareholders. 

The Activities of ASRY in 2008 

The 2008 was a successful year for ASRY, as the company was able 

to achieve the best results in its history, and that’s due to the sincere efforts 

of its board, executive management and all staff in addition to its agents 

around the world. 

In 2008 the Bahrain shipyard had sales over $200 million, ASRY has 

a strong cash flow, and is now debt free for the first time in its history. In 

the past year, ASRY put new policies in place and these have paid off. The 

shipyard is now competitively priced, offers a quality service and now 

getting much closer to its customers. ASRY repaired a total of 133 vessels 

and offshore craft; 119 in drydock and 14 alongside. ASRY’s customer 

base is traditionally split between vessels owned by Arab operators and the 

international shipping market. 

Last year saw 72 vessels repaired from the international market, 

valued at $112.30 million, and 61 vessels from the Arab market, valued at 

$95.19 million. A total of 20 vessels came from the Saudi Arabia market, 

17 from Bahrain and 13 from Kuwait, with the latter bringing in the most in 

terms of revenue. Leading the way in the international market was Greece 

with 19 vessels, Norway with 17 ships, the United States of America with 

10 vessels and Brazil with nine ships. The business from Brazil, however, 

was the most profitable. 

Notable events during 2008 included: 

- Establishment of ASRY Offshore Services 

- Review of the yard’s strategic Plan 

- Approval of US $188.2M facilities expansion 

- Opening of two new slipways 

Signing of more Fleet Agreements with leading shipowners 

- Review of e-procurement system

- 22 vessels in the yard simultaneously in October. 

The Company's Financial Results for 2008 

The actual results for the year ends in December 2008, were very 

encouraging as the value of sales reached U.S. $207,917,818 compared to 

U.S. $164,391,615 in 2007. The net profit amounted to U.S. $ 68,742,276 

up by 74.8% from 2007 level, which amounted to U.S. $ 39,309,445. 

Training 

In 2008, the company has continued to implement its plans for the 

development of Arab employees, the objectives of those plans were to raise 

the Arabian employment rate, to employ more Arab trainees, and to 

improve the quality of performance and skills development and promotion 

of its staff. 

The training program included multiple aspects of the company needs 

in technical and administrative areas. The number of Arab employees 

increased from 801 in 2007 to 818 employees in 2008. As of 31 st of 

December 2008, the number of permanent employees was 1608 employees. 

The company also employed 72 temporary staff. 

ASRY organized various training programs for senior and middle 

management supervisory. ASRY also conducted 137 professional training 

courses and plenary sessions for its staff, over 1085 employees involved in 

these programs. 

The Company's Activities in the First Half of 2009 

There were 95 vessels repaired at the end of June 2009 compared with 

63 for the same period of last year. During this period, the number of 

specifications received by the company came to 300 compared with 226 

standard specification for the same period of 2008. The Arab market has 

been successful over the first half of the year with 46 vessels repaired 

including fifteen Saudi Arabian ships, 5 ships from UAE, 8 Kuwaiti ships 

and 11 Bahraini ships. Similarly, in the International market, there were 10 

Norwegian ships, 5 Greek ships, 8 from United States of America and 7 

British ships. 


In the first half of 2009, Net operating income amounted to US$ 

80,197,000 compared with US$105,707,000 in the same period of 2008.

III. THE ARAB PETROLEUM INVESTMENTS 

CORPORATION (APICORP) 

The Arab Petroleum Investments Corporation was established in the 

city of Khobar, Kingdom of Saudi Arabia on 4 September 1974, with all 

OAPEC member countries as shareholders. The authorized capital of the 

Corporation was U.S. $1200 million, and fully paid-up capital of U.S. $550 

million. The prime objective of APICORP is to participate in the equity, as 

well as the debt financing, of projects in the petroleum industry at large. 

These include all businesses which are based on the development, 

processing or transportation of the products of the oil and gas industry and 

its downstream derivatives. 

The Activities of APICORP in 2008 

APICORP conducts its operations on a commercial basis, in a 

business-like manner and with the intention of making a profit. The 

corporation participates in fourteen joint Arab projects in Saudi Arabia, 

Bahrain, Libya, Iraq, Egypt, and Tunisia. The operations of APICORP 

cover a wide array of activities such as petrochemical industries, nitrogen 

and chemical fertilizers, extraction and marketing of LPG, seismic services, 

drilling of oil and gas fields, storage of petroleum products. 

The company also continued its efforts to contribute in direct 

investment opportunities in the development of appropriate and 

economically viable long-term petroleum and petrochemical projects in the 

Arab world. The project management in APICORP is now evaluating 

number of investment opportunities offered by the private sector in Saudi 

Arabia, Bahrain, Libya, Oman, and Egypt. These includes independent 

storage in Setra in Bahrain and development methanol industry in Libya. 

Equity Contribution to Capital Projects 

In year 2008, the net fair value of APICORP investment portfolio 

amounted to US$ 283 million compared to US$ 343 million in 2007, 

representing a drop of 17.5% due to the decline in market value of 

YANSAB traded on the Saudi Stock Market (Tadawul). 

The following is a brief review of major developments in APICORP 

portfolio in 2008 and the first half of 2009: 

In mid of December 2008, Arab Company For Detergent 

Chemicals (ARADET) restarted the operation of Alkylation unit after a 15 

months of shutdown period due to excessive and repetitive power failure.

As a result the production of the unit was 1091 tons of linear alkyl benzene 

(LAB). The production was concentrated on the parafffin of which 18 

thousand tons was produced in 2008 compared to 9 thousand tons in 2007. 

ARADET has recently enjoyed a period of relative stability of electricity, 

and in light of this, the company has a plan to increase its production and 

sales in 2009 to about 32 thousand tons of alkyl benzene (LAB). 

Tankage Méditerranée TANKMED’s total storage capacity stands at 

300,000 cubic meters. As at the end of 2008, TANKMED maintained a 

capacity utilization rate of 96.4%. The expansion project, currently under 

construction, is going according to schedule and expected to come into 

stream in May 2009. 

In 2009, the company has allocated an estimated amount of 11 million 

Tunisian dinar in its budget as a capital expenditure for the expansion 

project (2) in order to meet the growing requirements of the local market 

(this includes building 4 new storage units with a total capacity of 79 600 

cubic meters). The company was scheduled to start the construction of this 

project before the end of 2009. Accordingly, the prospects for 2011 shows 

that company will have a complex for storage activities with total capacity 

of 485 thousand cubic meters. 

The efforts of The Arabian Industrial Fibers Company Ibn Rushd 

to develop its complex to stop the series of losses and turn them into 

profitability, the company’s adopted a plan based on the shutdown of 

cyclar unit used to produce aromatics and replacing it by using new 

feedstock in the production of aromatic in order to double the capacity of 

the company's production of purified terephthalic acid and polyester. The 

cyclar unit will be adapted to produce propylene and polypropylene from 

propane. By implementing this plan, it is estimated the production capacity 

of finished products will raise to 750 thousand tons of polyester, and 524 

thousand tons of the polypropylene, as well as some other products 

(benzene with capacity of 160 thousand tons per year) and 126 thousand 

tons of propylene. 

In 2008, Oriental Petrochemicals Company (OPC) Sought to 

increase the issued and paid up capital to one billion EGY pounds to set up 

a plant for the production of propylene from propane, in order to solve the 

problem of lacking of integration of company's complex industrial raw 

material (propylene), which are fully imported from abroad. 

The expansion project of Alexandria Acrylic Fibers Company 

(AFCO) has been completed 95% of the engineering work and 92% of civil 

works of the first production line and expected to come in stream in the 

third quarter of 2009. The project consists of four production lines of

similar production capacity of 36 thousand tons/year, which will be 

implemented in phases. 

On April 2007, APICORP officially joined the list of shareholders in 

Egyptian Agrium Nitrogen Products Company (EAgrium) by acquiring 

7% from the Canadian company’s share in the issued capital of Ogriom 

which amount to US $470 million . However, the construction of project 

brought to halt in April 2008 because of the opposition for the site of 

project. The Egyptian government has offered EAgrium’s shareholders a 

way out by transfer the project to another location in Damietta. The 

contractor (German Company OWDA) received the new location and part 

of the equipments which manufactured in Europe were shipped to the 

project site. The project is expected to be completed during the first quarter 

of 2012. 

With regard to Egyptian Bahraini Gas Derivative Company 

(EBGDCO), the American company (Exterran) has been selected to 

complete the engineering, supervision and supply of project equipments, to 

be constructed at Ras Choucair on the Gulf of Suez. The Egyptian 

company (Petrojet) has been selected as the contracting company for the 

implementation of civil and construction works of the project. The project 

is expected to be completed within 18 months starting from the month of 

July 2009 and will begin commercial production as early of 2011. The 

construction of Yanbu National Petrochemical Company Yansab plant 

has been completed and came on stream during the first half of 2009, the 

company’s announced the start of its commercial activities in July 2009. 

Financing of Loans Arranged by APICORP 

After three years of strong performance, the activity of project and 

trade finance slowed down during the first half of 2008 and followed by a 

deadlock during the summer. This is due to several interacting factors, in 

addition to the negative effects caused by the financial crisis, the energy 

sector in the Arab region has faced other challenges, especially the 

abundance of feedstock, the high cost of project implementation, the weak 

demand for petroleum products, and finally unprecedented volatility in the 

price of petroleum products. 

However, the decrease in the activity of project and trade finance 

during the year 2008 did not adversely affect the status of APICORP as 

effective player in financing oil, gas and petrochemical projects in the Arab 

region.

Project Finance and Foreign Trade 

The activity of project financing and trade decreased significantly in 

2008 as a result of negative impacts of the global financial crisis, which 

began to appear during the second half of 2008. Overall APICORP was able 

to achieve an increase in the revenue from its activity in project finance 

and trade, and financial advisory activity. In addition, the company's entry 

in the field of Islamic finance in the area of project finance and trade has 

also contributed to increase in its activity. 

In 2008, the project and trade management department has made 

satisfactory results in terms of arranging and financing strategic projects in 

the region. Where project and trade financing reached a total of 15 

operations, and the final obligation of the company amounted to US$ 807 

million, compared to 28 operation in 2007 and final obligation amounted to 

US$ 1.9 million. 

At the end of 2008, the net income related to funding the project and 

trade was about US$30 million compared to US$ 23.9 million in 2007. It 

worth mentioning the leading and effective role of the company's 

contribution in arranging and financing most of the important funding in the 

Arab region during the year. 

Financial Results for 2008 

APICORP achieved a net profit of US$27.6 million in 2008 compared 

to a net profit of US$79.7 in 2007. This decline is attributable mainly to the 

global financial crisis that has deepened over the last year. The operating 

revenues for the year 2008, after deducting the cost of financing, amounted 

to US$95.5 million compared to US$92.5 million in 2007. 

Based on the recommendation of the Board of Directors at its meeting 

in Bahrain in early April 2009, the General Assembly agreed to APICORP 

not to distribute profits in 2008, in order to support the financial position of 

the company, with a transfer of US$2.8 million to the legal reserve and 

US$41.9 million to the general reserve as part of retained earnings item. 

In 2008, the rights of shareholders decreased by 12% compared to the 

value of 2007, as the total reached U.S $895 million compared to U.S 

$1,020 million in 2007. This was largely due to a decline in market value of 

the shares of one of the companies listed in the stock market. The total 

assets at the end of 2008 dropped to U.S $3,564 million compared to U.S 

$3,573 million in 2007. On the liabilities side, the base of external funding 

rose to U.S $2.644 million in 2008 compared to U.S $2,511 million in 2007 

due to the access to more corporate deposits.

Training and Manpower 

APICORP is making every effort to develop the skills and capabilities 

of workers, in order to achieve a balance between training requirements 

necessary for the efficient performance of the work and the need to keep up 

with recent developments in economic, financial, petroleum, administrative 

and communications, and information technology. It also plans to train new 

Arab graduates who join the corporation immediately after graduation both 

locally and abroad. Such training would enable them to acquire practical 

and applied knowledge in the fields in which the corporation participates. It 

would also complement the knowledge they acquired in their academic 

studies. 

The corporation had 116 employees, most of whom were Arab 

nationals. There were 78 Arab employees and 38 non-Arab employees. In 

accordance with the strategy of human resources APICORP used to 

increase the number of non-Arab personnel in order to achieve a balance 

between the Arab and the non-Arab expertise in technical and specialized 

areas. 

APICORP Activities in First Half of 2009 

In the first half of 2009, the company provided financial consulting 

services for a number of companies in the region which are wishing to 

construct new projects or conducting feasibility studies and evaluating 

strategic plans of the existing projects. The company also funded the 

purchase of crude oil and petroleum products for national oil companies in 

partnership with regional financial institutions. Despite the difficult 

conditions currently being experienced in lending market in the region, the 

company was able to maintain the level of profit achieved during the first 

half of 2009, which amounted to about U.S$14 million, almost the same 

level achieved in the same period of last year. 

The Activity of APICORP in Financing Projects and Trade in First 

Half of 2009 

There has been little improvement in conditions of global financial 

markets during the first half of 2009, and therefore the activities of the 

project funding did not resume work yet, despite the signing of a limited 

number of financing operations in the region. There have been fundamental 

shifts in the market for financing projects in the Middle East, which in turn 

affected the ability of APICORP’s funding. 

The activity of the project funding has slowed down as a result of the 

absence of capable global financial institutions, since a large number of 

global financial institutions have withdrawn from the Middle Eastern

market. In the past, the number of active international financial institutions 

in the finance market didn’t exceed 15 banks. However, during the period 

2005-2007 the number of such institutions was doubled which led to 

finance the projects in competitive prices. 

Among the countries that have benefited from these global financial 

institutions which entered the finance market in the Middle East: Qatar, 

UAE and Oman. At the present time, the number of global financial 

institutions has been reduced dramatically to less than 10 institutions and 

their total funding also shrunk to about U.S$350-400 million. 

Many of the regional financial institutions suffered from the global 

credit crisis and the lack of funding in addition to the heavy losses incurred 

by some international financial institutions. A number of prominent 

regional financial institutions have stopped their funding as APICORP did. 

The Islamic banks are still active in the area of financing but its financing 

capacity, in turn, has decreased since they are funding with their local 

currencies with amounts not exceeding U.S$50 million for 3 to 5 years 

maximum. 

And most local banks in the region have stopped almost completely 

their total funding with U.S. dollar and reduced their funding in their local 

currencies. Saudi Arabia was the exception, where its banking sector is 

large enough to be affected by the global credit crisis due to laws and 

legislation that required the banking sector to focus on the domestic market. 

Saudi Arabian Monetary Agency (SAMA) has injected liquidity in the 

domestic banking sector that allowed to the sector to involve in long-term 

funding to a maximum of up to U.S$300 million in local currency for 

projects in infrastructure and energy field. 

Under these difficult circumstances experienced by the financial 

market, APICORP did not participate in financing of new projects since the 

summer of last year. A number of regional financial institutions has been 

resorted to take similar steps. 

It should be noted that, despite the almost complete cessation of the 

activities of financing the projects, other activities such as providing 

financial advisory and financing of trade has continued in progress. 


In the first six months of 2009, APICORP was able to achieve net 

income of U.S$24.8 million more than what is being expected.

Total Assets, Deductions and Shareholders’ equity as of 30 June 2008 

As of 30 June 2009, the Corporation’s total assets amounted to $3,559 

million, compared with $3,564 million as of 31 December 2008. This 

decline is attributable to the sale of part of securities portfolio to meet the 

obligations of financing the projects and the liquidity crisis in global 

financial markets. Due to the current credit crisis, the short-term sources of 

funding decreased to U.S. $ 1.964 million compared to U.S $ 1.995 million 

in December 31, 2008. Shareholders’ equity rose to U.S. $923 million, 

compared with U.S $895 million as of 31 December 2008. 

IV. THE ARAB PETROLEUM SERVICES 

COMPANY (APSCO) 

The Arab Petroleum Services Company (APSCO) was established on 

the 23 th November 1975 as a holding company based in Tripoli, Libya, with 

all OAPEC member countries as shareholders. The company’s authorized 

capital was 100 million Libyan dinars (LYD), and subscribed and paid-up 

capital was LYD15 million. APSCO’s goal was to provide petroleum 

services which used to be monopolized by major oil companies that owns 

the techniques and expertise and possessed the skills in that field. APSCO’s 

is the sole owner of the Arab Well Logging Company (AWLCO), and is a 

40% shareholder in both the Arab Drilling and Workover Company 

(ADWOC) and the Arab Geophysical Exploration Services Company 

(AGESCO). 

The Activities of APSCO in 2008 

APSCO decided to focus in the time being on improving and 

developing the activities of the existing specialized companies, namely: 

1. Arab Drilling and Workover Company (ADWOC) 

2. Arab Well Logging Company (AWLCO) 

3. Arab Geophysical exploration Services Company (AGESCO) 

as well as expanding through them and studying the possibility of 

opening branches for some of them in other member countries. 

APSCO’s Financial Results in 2008 

Total revenues of Arab Petroleum Services Company (APSCO) 

amounted to 3,670,421 Libyan Dinar in 2008. Net profit, after deducting 

administrative expenses of LYD 2,222,921, and deducting the amount of 

LYD 79,357 amendments of previous years, reached 1,369,043 Libyan

Dinar. This comprised 10% or LYD 136,904 in the legal reserve, and LYD 

1,232,139. Total retained profits became 3,253,480 Libyan Dinar. 


APSCO continued to monitor and support its three affiliated 

companies which are: Arab Drilling and Workover Company 

(ADWOC), Arab Well Logging Company (AWLCO) and the Arab 

Geophysical Exploration Services Company (AGESCO). APSCO 

considered the possibility of expanding their activities as a result of the 

increasing demand for drilling, geophysical surveying and well logging 

services. 

Training and Manpower in the first half of 2009 

As at 30 th June 2009, the number of employees was 19 all Arab in 

nationality. 

APSCO’s financial results in the first half of 2009 

Financial results of APSCO’s in the first half of 2009 were as depicted 

in following table: 

Total Revenues 

Total Expenses 

Total Profits 

4,843,000 Libyan Dinar 



1. Arab Drilling and workover Company (ADWOC) 

ADWOC was established in Tripoli, Libya, in 1979. The company is 

the main subsidiary of the Arab Petroleum Services Company (APSCO). 

The other shareholders are the Arab Petroleum Investments 

Corporation (APICORP) and the Kuwaiti owned Santa Fe International 

Company. The mission of ADWOC involves onshore and offshore drilling 

operations, well maintenance, drilling water wells, and performing other 

technical operations associated with drilling in member countries, as well as 

other countries. 

The Company's Activities in 2008 

At incorporation ADWOC had four obsolete rigs as a contribution of 

Santa Fe Company, and three new drilling rigs contributed by the Arab 

Petroleum Services Company. In recent time, the company has possessed 

17 drilling rigs in addition to a heavy transportation fleet and some other 

equipment.

In its main camp in the Sahara, the company operates an integrated 

complex of workshops include a workshop for the maintenance of heavy 

and light transportation fleet, a workshop for the maintenance of caterpillar 

engines. The company has recently opened BLOW -OUT PREVENTION 

SHOP (BOP), which is the first of its kind in the State Headquarters. 

The growth of the company during the previous period was through 

self-financing in addition to the use of loans from international financial 

institutes. Since the establishment ADWOC has achieved a very good 

operation rate of its drilling rigs and in most cases amounted to more than 

90%, in 2008 the operation rate reached 100%. 

As a consequence of the increased demand for drilling services during 

2007-2008 the company carried out the directives of the Board of Directors 

to expand its operations in order to meet the growing demand. 

In 2008, the new rig no. 20 which is manufactured by the American 

company (National Oil Well) was received. The new rig is equipped with 

rapidly moving system and device to rotate the drilling head. Upon its 

receipt the company assigned a work contract with Vepa company (Heroj) 

and started work in mid of June of the same year. Rig no.20 was classified 

by some operating companies in Libya as one of the best rigs which 

designed with its ability to move swiftly within the fields in the desert. 

As a result of a sudden increase on drilling rigs demand during the 

year 2007 and the beginning of 2008 the company's management has 

followed a policy of getting advantage of any opportunity to work, 

including hiring the drilling rigs or to participate with other companies, 

these actions have the following features: 

- Getting a greater share of available work. 

- Close the doors in front of the foreign companies and therefore expand 

work in the host country. 

- Getting a high return on low capital investment value. 

- Redistribution of some of the company’s administrative and fixed 

expenses on number of large rigs and thus to contribute to improve the 

profitability of drilling rigs owned by the company. 

- Getting the cash flow to meet company’s obligations, especially with 

regard to the payment of loans. 

- The exchange of technology and expertise with foreign companies. 

On this basis, the company entered into long negotiations with many 

companies and the results of these negotiations were a lease of six more 

rigs as follows:

- A new rig of 2000 hp from the Kuwaiti drilling company, a company 

partly owned by the State of Kuwait. 

- Five rigs, including three rigs of 2000 hp and two rigs of 1500 hp from a 

Chinese company, owned by the Chinese state, in addition to the renewal 

of the drilling contract of rig 604 which leased from the Croatian 

company Crosko. The company now operates a number of 24 rigs, 

including 10 drilling rigs owned by the company and seven rental rigs 

and 7 maintenance rigs owned by the company. 

It should be noted here that, during the year 2008, the company met all 

its financial obligations, and equipped their drilling rigs, both those owned 

or leased by the company and all entered the service. The company also met 

all the requirements for borrowing without any violations to the lenders. In 

addition to payment of all installments of the loans with interest, in 

accordance with the timetable set for the company as well as payment of all 

dividends owed to partners and accumulated for many years. 

In a quantum leap as a result of improved functionality in their 

management and operations, the company obtained the ISO 9001 and is 

seeking a set of certificates that support the company's position in the face 

of fierce competition with international companies operating in the area of 

drilling. 

The company's negatively affected by consequences resulting from the 

economic crisis during the first months of 2009, with demobilization of 3 

drilling rigs, including two owned by the company and the other is leased. 

The company was able to run one of its owned rigs in April 2009. The 

company's management remains seeking contract work for other rigs that 

have been demobilized. With regard to cooperation with Arab companies, a 

delegation from company paid a visit to the UAE National Drilling 

Company, to present the potential of the company and its expertise to the 

Department of National Drilling Company of Abu Dhabi (NDC) in order to 

expand the activities in other Arab countries. 


The Department of Training put into action a training plan for new 

trainees in order to meet the high and increasing demand for technical 

manpower and to meet the company's expansion plan in the future. Training 

Department has prepared a number of internal and external courses to 

familiarize the trainees with the nature of their work, especially in terms of 

safety precautions, and the development of a large number of drilling rigs' 

managers and in the field of contraception and control of the explosions on 

the wells. The number of trainees attending these sessions was 48.

Financial Results in 2008 

The financial results of the company during the 2008 were better than 

expected. Net Profits in fiscal year ended in 31 st December 2008 amounted 

at US$ 27,317,567, higher by US$ 10,647,260 comparing to 2007 level. 

The company’s General Assembly met and decided to distribute dividend 

by 50% of the distributable profits, after deducting all reserves for the 

financial year ended 31/12/2008. 

The Activity of the Company during the First Half of 2009 

The first six months of 2009 witnessed a decline in demand for 

drilling operations, as some companies postponed a lot of drilling and 

exploration programs due to the consequences of global financial crisis. 

During the above period two drilling rigs-owned by company (drilling rig 

no. 19 and drilling rig no. 3) have been laid off. In May 9002, the company 

has contracted rig no. 3 and it started its work, the company is still striving 

to get opportunity work for rig no. 19. 

Rig no. 1 which operating in Syria has completed its working 

contracts with Deir al Zor oil company and awarded new contract for two 

years with Petro-Canada, and it started the work by the end of the first half 

of 2009. 

As a result of the global economic crisis, several drilling programs 

have been postponed for a number of companies which led to the decline in 

demand for drilling rigs. In the host country (Libya), there are currently 

about 16 rigs parked in the area of drilling and about 7 rigs parked in the 

area of maintenance; however signs of economic recovery are expected to 

increase demand for drilling services during the year 2010. 

Training During the First Half of 2009 

During the first half of 2009 the company organized 11 training 

programs, at least 351 trainees benefited from those programs which 

covered the areas of drilling, mechanics and electricity, and safety. 

Financial Results in the First Half of 2009 

The company has achieved a net profit of U.S. $ 9,929,603 during the 

first half of 2009, which represents an increase of 17% compared to the 

estimated budget. 

2- The ARAB WELL LOGGING COMPANY (AWLCO) 

AWLCO was established in Baghdad, Iraq, on 24 March 1983 with an 

authorized capital of 7 million Iraqi dinars, with all OAPEC member 

countries as shareholders. The company is specialized in performing well

logging and perforation operations, and other well-related technical 

operations necessary for discovery and development of oil fields. AWLCO 

owns two operation centers one in the southern Iraq and the other in the 

North. 

The Company's Activities in 2008 and the First Half of 2009 

In 2008, the company continued its logging and perforations services 

provided to wells across Iraqi fields, their activities as follows: 

- Increase the number of operations that have been implemented for a 

number of companies. 

- Increase the company's revenues through the development of the services 

provided. 

- Increase the company's profits through higher revenues and lowering the 

costs as possible. 

- Provide logging and perforations services for private companies 

contracting with the Iraqi Oil Ministry. 

- Provide new services to the corporate sector, such as sensors to measure 

the erosion of lining wells. 

- Drilling wells services are still the major revenue for the company. 

- The company managed to buy a number of vehicles, equipments and 

spare parts to invest their profits in this area. 

- The company continued conducting the maintenance and rehabilitation of 

facilities, vehicles, and old equipments for the purposes of sustaining 

work. 

The company's business has doubled the revenue year after year, 

which enabled it to achieve good profit, as the logging and perforation 

operations reached 381 successful operations during 2008 and the first half 

of 2009. The income and profits for the same period amounted at 

US$8,121,608 and US$4,104,204 respectively. As the coordination with the 

Iraqi oil ministry and North and South oil companies continued. 

Furthermore, the coordination with the Oil Ministry and its 

departments of central and northern oil companies and oil companies on the 

requirements of various work has continued, for instance: 

- The Ministry of oil directed its operating companies in the exploration 

sector to approach the global companies to perform logging and 

perforation services only if AWLCO withdraw from providing the 

requested service.

- The Ministry of Oil raising cost of operations for the year 2008 by 45% 

comparing to 2007. 

- The exploration companies will add 15% on cost of work when they use 

and new equipments and devices. 

- The Ministry provided the company with new logging truck worth of 

US$992.224, and will deduct the cost from the old debt. 

- The ministry continued to provide the necessary support to stop foreign 

companies from the acquisition of engineers and operators employed by 

AWLCO through inducements. 

- The Ministry has provided the company with all types of fuels and work 

requirements. 

- Provide the necessary protection and security services for the company 

and its affiliates. 


During 2008 and first half of 2009, a number of the company's 

employees involved in training courses within the country offered by 

German, American, Turkish and Chinese. In addition to opportunities for 

training the company’s engineers with British companies and other training 

programs in United States of America. 

As of 31/12/2008 the Company’s staff totaled 65 employees, 

including two Arab nationals (an Egyptian and another Sudanese) and the 

rest were Iraqis. 

Financial Results in 2008 and the First Half of 2009 

The balance sheet of AWLCO in 2008 showed that the revenues, 

excluding interests, amounted to US$4,082,679, while the total expenses 

totaled US$ 2,325,942. In 2008 the company achieved a net profit of 

US$ 1,756,737. During the first half of 2009, the company's revenues, 

excluding interests, reached US$4,038,929, while the total expenses 

amounted to US $1,691,462 this led AWLCO to achieve a net profit of 

US $4,347,467. 

As a result the company’s total net profit during the period from 

1/1/2008 to 30/6/2009 reached a record high of US $ 4,104,204 the highest 

level ever. 

3- The Arab Geophysical Exploration Services Company (AGESCO) 

The Arab Geophysical Exploration Services Company (AGESCO) 

was established in Tripoli, Libyan Arab Jamahiriya on 1984 with an 

authorized capital of 12 million Libyan dinars and a paid-up capital of 4 

million Libyan dinars.

The Arab Petroleum Services Company and Halliburton has an equal 

share of 40% in AGESCO, and the Arab Petroleum Investment Corporation 

(APICORP) and the Libyan National Oil Corporation with 10% each. 

The Company's Activities in 2008 

Crew AG002 continued operations by carrying out 3-D and 2-D 

seismic surveys with operations for Verenex in block 47. By April 9 th , the 

crew completed surveys covering a total of 2492.18 km in length. Then the 

crew moved to work for RWE in block 195, during the period April 20 th to 

June 16 th the crew covered 271.92 sq km of 3-D survey. Later the crew 

awarded a contract by Arabian Gulf Oil Company in concession no NC-100 

covering 1200 sq km of 3-D survey. 

During the period June 28 th to December 31 st 2008 the crew covered 

711.23 sq km of 3-D survey. As a result the total work of Crew AG002 in 

2008 covered: 

- 2492.18 km of 2-D survey. 

- 983.15 sq km of 3-D survey. 

Crew AG003 continued working for Arabian Gulf Oil Company in 

concession no A-8, the crew completed surveys covering a total of 28.05 sq 

km of 3-D survey. Later it moved to work for the same company in block 

47 Al-Baida, the crew completed a total of 97.59 sq km of 3-D survey. 

Then the crew stopped its work pending the approval of NOC on Arabian 

Gulf oil programs. 

After that the crew AG003 moved to work in block 131 for the same 

the company, it completed surveys covering a total of 339.64 sq km of 3-D 

survey. Soon after the crew awarded a work contract by the same company 

(Arabian Gulf Oil Company) in block NC-A7, by September 29 th 2008 the 

crew completed a total of 651.41 sq km of 3-D survey. After that the crew 

moved to work for the same company in block A8, by the end of 2008 the 

crew completed a total of 459.77 sq km of 3-D survey. 

As a result the total work of Crew AG003 in 2008 covered 1576.46 

km of 2-D survey. 


In year 2008, the company's revenues totaling LYD 59,242 and 

total expenses LYD 51,491.This led AGESCO to achieve a net profit of 

LYD 7,751.


The company pays a special attention to the training programs, through 

both the external sessions and local courses in workplace in various fields. 

At the end of 2008 the number of company's employees was 658 workers, 

of whom 520 Libyan, 96 Arab nationalities, and 42 foreigners. 


Crew AG-002 continued its work for Arabian Gulf Oil Company in 

block NC 100, by the end of January , February and March the crew 

completed a total of 134.41 , 136.96 and 131.23 sq km of 3-D survey 

respectively, and during the period 1-18 April the crew completed 80.16 sq 

km of 3-D survey. As of May 4 th 20009, AG-002 crew moved to work in 

block no NC -5 for Arabian Gulf Oil Company by the end of June 2009 the 

crew carried out 393.96 sq km of 3-D survey.During the period January to 

June 2009, the crew completed 3-D survey covering a total of 875.72 sq 

km. 

Crew AG-003 launched its work in 2009 in block NC -100 for 

Arabian Gulf Oil Company by carrying out a total of 15.89 sq km of 3-D 

survey in the period 1-4 January to fulfill its 2008 plan of work. The crew 

continued its work in the same block by carrying out 103.99 square 

kilometers in the period 4-31 January 2009. Then crew AG-003 moved to 

work in block NC-2 for the same company carried out a total of 142.95 

square kilometers in February 2009, and 205.99, 195.28, 201.03, 196.19 sq 

km of 3-D survey in March, April, May, and June respectively by 

implementing Slip Sweep method. During the period January to June 2009, 

the crew completed 3-D survey covering a total of 1061.32 sq km. 

Crew AG001, with Western Geco Company, carried out wells survey 

services for the RWE Company in block 58, this work is composed of 

surveying and drilling of 418 wells. During the period 3rd of February until 

3rd of May 2009, Crew AG001 completed the agreed upon work. Another 

crew with the same company is carrying out three-dimensional survey for 

BP in Ghadames Basin .The work began in mid-November 2008 and the 

crew had completed their operations in February 2009. 


The company has continued to take the issue of training in different 

areas of work of particular importance. During the first half of 2009, the 

company send one employee to France for three week to attend a training 

course related to New equipment used for seismic surveys.

At the end of the first half of 2009 the number of employees in the 

company totaled 726 including 578 Libyan, 105 Arab nationalities, and 43 

foreigners. 

Financial results in the first half of 2009 

In the first half of 2009, the company's revenues totaling LYD 34,025 

and total expenses LYD 26,319. The net profit amounted to LYD 7,706. 

4 - Arab Company for Detergent Chemicals (ARADET) 

The company was established in Iraq on 12 March 1981, with an 

authorized capital of $ 72 million Iraqi dinars, and subscribed and fully 

paid-up capital of 36 million Iraqi dinars. Equity in the company is held by 

three member countries (Iraq, Saudi Arabia and Kuwait), and (APICORP), 

the Arab Company for Mining Jordan, and the Arab Investment Company. 

The company's activity in 2008 

In mid of December 2008, ARADET resumed its production of 

primary product alkyl benzene (LAB) after the major maintenance work on 

the production line which took more than one year. 

The operational problems and the deteriorating security situation in 

Republic of Iraq has led to the stoppage of aromatics and alkylation lines 

on one hand, and the sharp and unprecedented rise in commodity prices 

which led to reducing the demand for the final products on the other, has 

contributed in the significant loss incurred by the company. ARADET’s 

negotiations with the Ministry of Oil in 2008 has led to getting additional 

discount on the feed stocks, as the total discount became 19% instead of 

10% level agreed on 31/12/2008. 


Despite the support of the Ministry of Oil, the balance sheet of the 

company's showed net loss of US$1.655 million in 2008 compared to a loss 

of US$1.385 million in 2007. 

This was due mainly to the disruption in the production of alkyl 

benzene (LAB) resulted from rehabilitation of production lines and low 

quantities sales toluene as well as the high cost of raw materials up to the 

third quarter of 2008.

Manpower and Training 

At the end of 2008, the number of employees was 319 workers 

including 279 Iraqis and the rest Arab workers. The company's staff holds 

short-term training courses in some technical areas for the new residents in 

the company's camp. 

A number of staff was participated in technical, administrative, 

accounting and IT courses, and others were sent to attend technical sessions 

and training programs in Jordan, Syria and the United Arab Emirates. 

The Company's Activity in the First Half of 2009 

During the first half of 2009, ARADAT signed an amendment to the 

Convention on the supplying of feedstocks effective for a period of three 

years starting from 1 st of January 2009. The amendments resulted in drastic 

changes in the price formulas for the supplied materials. 

The company began to make its vision to improve the economics of 

production of benzene through a variety of technical and economic studies. 

ARADAT has begun issuing invitations for companies with competence 

and reliability in the development of the production of benzene and other 

aromatic products, the completion of this study is expected in this year. The 

company is developing the performance of paraffin line by the addition of 

three water coolers in the production unit (Molex - unit). The 

manufacturing operations were completed by Turkish company and the 

operation of the unit is expected in the fourth quarter of this year. The 

company is also working on the development of its computer software. The 

increase in the constraints and disadvantages faced by the company since 

2007 reflected a negatively on the company's activity in the first half of 

2009, frequent interruptions of electricity, the disruption of flow of raw 

materials, delays in maintenance work in the alkylation and aromatics unit, 

reflected negatively on the operation of aromatics and alkyl benzene 

production lines. 

Manpower and Training 

As of 30/6/2009, the number of employees in the company totaled 

321, among them 281 Iraqi. The company continued to organize technical 

sessions at the work site, and participating in number of specialized courses 

in Bagdad, and sending about 30 of its staff for training in Jordan, Syria, 

and Turkey.

Financial Results in the First Half of 2009 

During the first half of 2009, Accounts showed that the company had 

endured loss of US$ 2.364 million. After deducting the loss from the 

income of financial investments and other income which totaled of 

US$2.428 million, a net gain of US $ 68 thousand is achieved. Despite the 

imposed challenges during the first half of the year 2009, the company has 

managed to bring good gains in the level of gross and operational profit. 

This was as a result of the best use of available resources, despite 

fluctuating oil prices and improves the production process after the general 

maintenance of the line alkylation. In the first half of 2009 the company 

achieved a profit of US$647 thousand and after the addition of investment 

income and other incomes which amount to US$558 thousand, the net 

profit reached US$1.205 million. 

APPENDICES 

I. PRESS RELEASES OF OAPEC 

MINISTERIAL COUNCIL MEETINGS IN 2009 

1- The Eighty – second Meeting of OAPEC Council of Ministers 

OAPEC’s Ministerial Council held its 82 nd meeting in Cairo, Egypt, 

on 25 May 2009.The meeting was at the level of the Executive Bureau 

members representing the ministers and was chaired by Mr. Ahmad al- 

Ashmawi, Representative of Egypt, which holds the chairmanship of the 

Executive Bureau in its current session(2009). 

The Council approved the final accounts for 2008 for the General 

Secretariat and the Judicial Tribunal. It reviewed the Secretariat’s 

activities since its last meeting and the studies it had conducted on 

petroleum industries, energy and the environment affairs. It also reviewed 

reports on the Secretariat’s symposiums and meetings in addition to 

planned symposiums on various topics for this year. 

The Council followed up preparations for the 9th Arab Energy 

Conference to be held in Doha, Qatar, 9-12 May 2010. 

The Council sent a letter of condolence to President Mubarak, 

expressing its deep sorrow for the loss of his grandson. 

The Council concluded its meeting, expressing its gratitude to Egypt 

for facilitating the success of the meeting.

2- The 83rd Meeting of OAPEC’s Council of Ministers 

The Ministerial Council of the Organization of Arab Petroleum 

Exporting Countries (OAPEC),held its 83rd meeting on Saturday, 18 Dhul 

Hijja 1430 AH, corresponding to 5 December 2009, in Cairo, Egypt. The 

meeting was chaired by H.E. Mr. Sameh Fahmi, Egypt's Minister of 

Petroleum, and chairman of the Organization's current session (2009). 

After inaugurating the meeting, the chairman welcomed the ministers 

and heads of delegations, and expressed the hope that the outcome of 

items on the agenda to be discussed during this session would be fruitful. 

He also stressed that the ultimate goal of the Organization is to ensure 

cooperation among its members in various aspects of economic, technical 

and human activity in the oil industry. 

The chairman addressed some issues related to the oil industry in the 

Arab region and the world and their impact on OAPEC member countries. 

Talking about the current global financial crisis and its impact on the oil 

market and on oil exporting countries, he called for more coordination at 

all levels to overcome repercussions of that crisis. He asserted that the 

nature of the coming phase requires OAPEC member countries to stand 

together and continue to work hard to protect their interests. They need to 

take positive action so as restore balance to the world oil market so that 

equitable price levels for both producers and consumers are achieved and 

sufficient supplies are ensured for consumers. 

H.E. Mr Samih Fahmi made two proposals: 

- Firstly: The setting up of new OAPEC-sponsored companies specialized 

in petroleum industries similar to those already established. The aim 

would be to broaden the range of petroleum services and equipment 

manufacture so as to increase the value added to participating countries 

and extend Arab manufacturing capability to numerous phases of the 

petroleum industry. 

- Secondly: To activate OAPEC's role in coordinating petroleum policies 

in the coming phase and to benefit from the weight that member 

countries carry in OPEC and OAPEC, as well as the Gas Exporting 

Countries' Forum. This would help restore stability to oil and natural 

gas markets and subsequently help enhance OAPEC's role. H.E. Mr 

Fahmi also called on OAPEC to continuing updating its study entitled, 

'The world financial crisis and its impact on OAPEC member 

countries,' which was presented at the Arab Economic, Social and 

Development Summit, Kuwait, January 2009.

The Council then awarded prizes to the winners of OAPEC 

Scientific Award for 2008 for their research on 'The Capture and Storage 

of Carbon Dioxide'. The Ministerial Council created this Scientific Award 

in 1985 in order to promote scientific research in the petroleum industry. 

The Award is governed by certain conditions requiring that research 

subjects should be relevant to advancement in the fields of basic or 

applied scientific research that contribute to the development of oil 

production techniques, and improving the outcomes of oil projects in 

various aspects of oil industry. So far, the prize has been awarded twelve 

times since 1988. 

Afterwards, the Council reviewed topics on its agenda and took 

appropriate decisions regarding them. The major topics were: 

- Approving budget estimates of the Organization (the General Secretariat 

and the Judicial Tribunal) for 2010 at KD2,053,800 (two million and 

fifty-three thousand and eight hundred Kuwaiti dinars) 

- Reappointing Bazie & Partners as auditors of the Organization's accounts 

(General Secretariat and Judicial Tribunal) for 2010. 

- Adopting the recommendations of the Executive Bureau regarding the 

activity of the – Organization in monitoring environment and climate 

change, and the report on the latest developments in the United Nations 

Framework Convention on Climate Change and the Kyoto Protocol, 

and preparations for the next Conference of the Parties (COP-15) on 

Climate Change to be held in Copenhagen. 

- Adoption of the recommendations of the Executive Bureau regarding 

the Organization plans in the development of the data bank, and 

organizing seminars and meetings or participating in them, and studies 

prepared by the Secretariat. 

- Reviewing preparations for the 9th Arab Energy Conference to be held 

in Doha, Qatar during the period from 9 - 12 May 2010. 

- Extending Iraq's supervision over the Arab Petroleum Training Institute 

for one more year with effect from 1 January 2010. 

- Reviewing a report on the activities of projects of companies emanating 

from the Organization. Furthermore, the Council was informed of the 

results of the 38th coordination meeting of the officers in charge of 

these projects, which was held in Cairo, 10 October 2009. 

- The United Arab Emirates preside over the next session (2010) of 

OAPEC's Ministerial Council and the Executive Bureau, in accordance 

with the alphabetical order of member countries, as of 1 January 2010.

It was agreed to hold the next meeting on 11 December 2010, 

corresponding to 5 Muharram 1432 AH in the city of Sharm el-Sheikh. 

On behalf of the ministers and heads of delegations, the Council 

president sent a cable to the Egyptian President Mohammed Hosni 

Mubarak, expressing their profound thanks and appreciation for the 

hospitality and honor bestowed on them during their stay in Cairo.

II. MEETINGS AND SEMINARS SPONSORED OR 

ATTENDED BY THE GENERAL ECRETARIAT,2009 

Title Venue Date 

January 

- Arab Economic and Social Development Summit 

- 10 th Japan-Kuwait Joint Symposium in Petroleum 

Refining Industry. 

February 

- Meeting of WEC Cleaner Fossil Fuels Systems 

Committee 

- 83 rd Meeting of the Economic and Social Council 

Kuwait 

Kuwait 

Dubai 

Cairo 

19-20 

20-21 

5 

8-10 

March 

- NOCs and IOCs Forum 

- The Meeting of Experts on Energy Statistics 

May 

- The Meeting of the Higher Committee for Joint Arab 

Action 

- The Second Middle Eastern and North African Carbon 

Forum 

- 5th International Conference and Exhibition for Oil and 

Gas )INTERGAS( 

- Meetings of the Arab League on Electricity 

Kuwait 

Beirut 

Cairo 

Cairo 

Cairo 

Cairo 

30-31 

3-5 

4-6 

6-7 

12-14 

17-21 

June 

- 9 th Meeting of Sectoral Cooperation Between the Arab 

League and the UN and its Specialized Agencies 

- Committee Meeting for the Institutions Involved in the 

Preparation of the Joint Arab Economic Report for 2009 

Cairo 

Abu Dhabi 

17-18 

21-23

October 

- The 8 th Syrian-Egyptian Chemical and Petroleum 

Engineering Conference 

- Investment in Oil, Gas and Petrochemicals during the 

World Financial Crisis Conference 

- 4 th IEA Meeting on the International Energy Statistics 

Syria 

Bahrain 

Paris 

13-15 

20-21 

22-23 

December 

- 2009 International Petroleum Technology Conference 

(IPTC) 

- The Fifth Workshop of the International Lithosphere 

Program (ILP) 

- Small and Medium-Sized Oil Industries Conference 

and Exhibition 

- Preparatory Meeting on Compiling the Joint Arab 

Economic Report 2010 

Doha 

Abu Dhabi 

Kuwait 

Cairo 

7-9 

6-11 

13-14 

21-23

chapter two - OAPEC

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