Middle East response to low oil prices: short-term pain for long-term gain? Report

Insight 31 March 2020

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

Report summary

With oil revenue collapsing, all Middle East countries will need to tighten their belts. Budgets will be reassessed and big projects such as North Field Expansion in Qatar and Ghasha in the UAE will be under real scrutiny, as will higher cost drilling and EOR activities. But relative to the rest of the world, the Middle East should come out of the crisis in a stronger position. It will increase its share of global oil production. And it will set itself up for the longer-term with an increased share of global upstream investment.

All Middle East countries need to tighten their belts
NOCs can mitigate revenue losses
Some IOCs benefit from resilient barrels

Tables and charts

This report includes the following images and tables:

Fiscal breakevens prior to March 2020 (the oil price required to balance the state budget)
Federal Iraq payment to IOCs
Federal Iraq oil revenue share going to IOCs

NOC portfolio value sensitivity for a US$10/bbl reduction in oil price
IOC upstream projects value sensitivity for US$10/bbl drop in oil price
Impact of a US$10/bbl oil price reduction on the Middle East IOC upstream portfolio
Middle East IOC value per boe at US$50/bbl long-term
Capex per flowing boe
Middle East pre-FID projects and risk (of delay) status