Algérie Presse Service (APS) - October 9, 2012
WASHINGTON - Algeria will be the third biggest investor on energy projects in the Middle East-North Africa (MENA) region over the next five years, said a report issued yesterday by Bloomberg, the U.S. economic and financial information agency.

"With $71 billion of potential spending in the energy sector over the five-year period 2013-2017," Algeria should rank in third position behind Saudi Arabia ($165 billion in planned investments) and the United Arab Emirates ($107 billion in planned investments), said the Bloomberg report, quoting Arab Petroleum Investments Corp. (APICORP, an OAPEC corporation.)

In terms of investment spending, over the next five-year period, Algeria will overtake Iran, Iraq and Qatar as the third-biggest investor in a region including 19 petroleum-exporting countries.

Moreover, total investment spending on energy projects by MENA region oil producers should reach $740 billion over the next five-year period 2013-2017.

Oil price increases should help the region's oil producers to resume projects delayed by the serious global financial crisis, the report said.

Countries in the region can finance projects on their own as long as the basket of OPEC crudes stays at more than $100 a barrel, the same source said, adding that the basket stood at $107 a week earlier.

However, the report noted, contrary to oil investments, export-oriented natural gas projects face market uncertainties because international gas prices greatly deviated from oil parity, but they have kept diverging between regional markets."

In that sense, the report said that natural gas prices are likely to grow by $3 to $5/MBtu in markets with abundant domestic supplies and by $12 to $15/MBtu in markets relying on imports under long-term contracts.

The report also stressed that socio-political turmoil experienced in some MENA countries and their negative impact on investments represent the present pattern of planned investments in the region.

However, in a larger context, and despite a weaker global economy and decreased oil demand, OPEC is likely to maintain the value of its crudes basket at its $100 fiscal break-even price.

Any external financing, which comes predominantly in the form of loans, is likely to be particularly challenging due to dwindling lending resources caused by the global financial crisis.

Policymakers in the region, said the review, should focus "their commitment on improving the investment climate and restoring investors' confidence."