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Shell: Region well placed to meet rapid growth in demand for gas

Posted: 10 May 2004

Shell director welcomes moves that will encourage new energy industry investment

The Middle East is well placed to take advantage of the rapid growth in world demand for gas which could overtake oil as the “fuel of choice” within the next 25 years, Andrew Vaughan, the Regional Technical Director for Shell Exploration and Production, told an international conference in Bahrain today.

Speaking to delegates attending the Middle East Petroleum and Gas Conference (MPGC), Andrew Vaughan, who is responsible for development projects across the Middle East, Russia and CIS, said that oil demand would continue to grow and consumption could be as high as 110 million barrels a day by 2020. But, he emphasised: “World demand for gas is likely to grow even faster.”

Pointing out that the region’s gas resources accounted for 36 per cent of the world total, Mr Vaughan said: “Gas projects in the region can complement and supplement oil, and bring added value”.

In order to fulfil the potential these resources present, the Middle East would have to overcome a number of “significant challenges”, Mr Vaughan continued, especially the question of pricing, the need for investment and competition for both capital and market share from around the world as well as technical challenges. “But none of them creates an insurmountable barrier to global or Middle East energy security.”

Mr Vaughan welcomed moves in recent years by resource holders in the region to create a more open business environment which was “a crucial consideration for a company trying to decide where best to invest its capital”.

Among those moves, he cited production-sharing agreements that had already brought benefits to resource holders in the region. “They have proved very effective in achieving a balance of incentives between governments and oil companies”.

Other “welcome developments”, said Mr Vaughan, had been the privatisation programme in Saudi Arabia, progress in the negotiations for Saudi Arabia to join the World Trade Organisation and moves forward in free trade area negotiations between the Gulf Co-operation Council (GCC) and the EU and US.

He continued: “Clearly, as the business climate in the Middle East becomes more open and forward looking, it becomes ever more attractive in terms of investment propositions [from the international private sector] as well”.

Shell also contributes a mobile laboratory which is used to examine residues and emissions at every Formula One track to gain insights into car performance. This includes analysis of metal particles present in oils which provide early indications of engine and gearbox wear.

Shell and Ferrari have together won more than 100 Formula One races. This season the partnership has already earned Ferrari 33 out of a possible 38 championship points.”

For more information see www.shell.com

Posted by Richard Price, Editor Pipeline Magazine

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