Challenges facing the financing of oil production capacity in the Gulf

The estimates of the required capital for maintaining and expanding oil production capacity in the 'Big Five' producers in the Gulf (Iran, Iraq, Kuwait, Saudi Arabia and the United Emirates) are large numbers. In fact, looking at the total cost of raising the Gulf oil production capacity from 18.5 million b/d in 1990 to 26.8 million b/d in the year 2005, the eventual sum is likely to end up at around $192 billion (1990 $) of which about $150 billion will be required as normal investment to maintain current output levels, and a further $42 billion will be necessary to develop new capacities. In short, the Gulf countries will need to spend an average of $12-13 billion per year to maintain current production and to raise some 8.3 million b/d of new capacity by 2005. (author)