MENA upstream: 2019 in review – and a look ahead

In 2019, Latin America laid a firm basis for future growth in the E&P sector. Licensing rounds drove the attention of upstream companies across several countries, that attracted investment to development and exploratory acreage. Petrobras emerged as the clear winner in Brazil’s offshore rounds, while ExxonMobil and Tullow Oil sustained their exploratory success in Guyana. Argentina’s Vaca Muerta is a rising star, although country volatility may slow-down the development pace.

Fiscal change and two full years of depressed commodity prices have shaped the outlook on Alaska's North Slope. On one hand, with six fields under development or evaluation, the project pipeline is the busiest it has been in years. Discovered volumes were at a multi-year high and key appraisal programmes are planned in 2017. On the other hand, fiscal uncertainty and low oil prices have challenged operators and caused delays. HB 247 was passed in mid-2016 and impacts newer fields and small operators the most. Additionally, the new Trump Administration will work through its new energy policy agenda, which will have repercussions for the federal lands on Alaska's North Slope.

The four largest service companies all reported lower revenues for the Middle East/Asia region.  However, key development projects in the region continued apace. Eni pushed ahead with development plans for Zohr in Egypt, the Faihaa oil field came onstream in federal Iraq and in the UAE, Occidental's Shah sour gas development fully ramped up production. Qatar awarded the first Bul Hanine redevelopment contract, and Kuwait's long awaited Al Zour refinery contracts were signed. In other events, Libyan production increased as Zueitina reopened, Israel got closer to signing off the Leviathan gas agreement and Oman made its first award from its 2014 bid round. We also look ahead to Iran unveiling its new fiscal terms at the end of November.