Middle East Upstream: 2014 in review Report

Insight 06 March 2015

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Report summary

Political events continued to define the outlook for the Middle East's upstream sector throughout 2014. Despite the emergence and expansion of IS, liquids production across the region remained constant while gas production increased by 4%. Exploration continued its downward trend of recent years with fewer discoveries and less volumes than 2013. M&A activity remained under 1% of the global total, as NOCs continue to dominate the region.

Executive summary
- Geopolitics main reason for supply outages
  - Islamic State's expansion into northern Iraq jeopardised upstream developments
  - Nuclear talks continue whilst Iran uses condensate sales to exceed export cap
  - Increased civil unrest threatens survival of Yemen's upstream industry
  - East Mediterranean export deals held back by regulatory hurdles
- New projects brought onstream as gas production increases
  - Overall gas production increases 4%, liquids production remains flat
- Exploration expanded out of traditional areas
  - Iraq remains focus for exploration
  - Saudi retreat from the deepwater
  - into the unconventional
- Several IOC manoeuvres in a landscape dominated by NOCs
  - Majority of Middle East M&A activity in Iraq
  - Licence awards were few and far between
  - Woodside pulled out of Israel deal as sector grinds to a halt
  - Increasing Asian NOC interest in the Gulf states
  - Middle East M&A deals