Current MENA Energy Developments:The Trends by Sub
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CSIS_______________________________ Center for Strategic and International Studies 1800 K Street N.W. Washington, DC 20006 (202) 775-3270 Access: Web: CSIS.ORG Contact the Author: [email protected] Current MENA Energy Developments: The Trends By Sub-Region and Country DRAFT FOR COMMENT AND REVIEW Anthony H. Cordesman Arleigh A. Burke Chair in Strategy Center for Strategic and International Studies March 15, 2004 Copyright Anthony H. Cordesman, all rights reserved. May only be quoted, excerpted, or referenced with the author’s written permission. Energy Developmets in the Middle East 3/16/04 Page ii Acknowledgements The author would like to thank Jennifer Moravitz, Mehmet Emre Furtun, Stephen Lanier, Adam Whetsone, Daniel Berkowitz, Paul Famolari and Ghada Elnajjar for their help in researching and editing prior work on energy developments in the Middle East and North Africa during past years, and Jennifer Moravitz, Emre Furtun, Stephen Lanier for work drawn upon in this study. He would also like to thank his colleagues James R. Schlesinger and Robert Ebel for their advice and help over many years. This book would also have been impossible to write without the efforts of the Energy Information Agency of the US Department of Energy, and particularly of its country and area analysts. Much of the country and regional analysis is taken from this work by the EIA, and its analysts deserve great credit for consistently excellent reporting over the years. Their work can be readily access via the web at http://www.eia.doe.gov/emeu/cabs/cabsme.html. The work of the International Energy Agency was also of great value, especially in writing the sections on energy investment in Chapter V. Credit should also be given to the many press sources used in researching this book, and particularly to four publications that provide consistently excellent reporting on regional political, economic, and energy developments: the Economist, the Estimate, Middle East Economic Digest, and Middle East Economic Survey. While this book relies primarily on official US government sources, and international organizations like the International Energy Agency and World Bank, for its data and citations, extensive use was made of press sources in researching this analysis. Copyright Anthony H. Cordesman, all rights reserved, Copyright Anthony H. Cordesman, all rights reserved. May only be quoted, excerpted, or referenced with the author’s written permission. Energy Developmets in the Middle East 3/16/04 Page iii TABLE OF CONTENTS Acknowledgements......................................................................................................................................................ii IV. CURRENT ENERGY DEVELOPMENTS: THE TRENDS BY SUB-REGION AND COUNTRY..............1 THE IMPORTANCE OF THE GULF REGION...................................................................................................................1 Gulf Oil Exports...................................................................................................................................................2 Gulf Gas Exports..................................................................................................................................................4 Country Trends and Risks ....................................................................................................................................9 Saudi Arabia ..................................................................................................................................................................... 9 Saudi Oil Production Plans........................................................................................................................................ 10 EIA versus Saudi Projections..................................................................................................................................... 11 Key Uncertainties in Estimates of Saudi and Other MENA Increases in Production: The Simmons Challenge ....... 13 The Saudi Aramco Response..................................................................................................................................... 15 Saudi Ability to Ship and Transport Oil .................................................................................................................... 17 Saudi Natural Gas Resources..................................................................................................................................... 18 Saudi Need tot Increase Domestic Use of Natural Gas.............................................................................................. 19 Saudi Arabia and Energy Risk................................................................................................................................... 23 Iraq.................................................................................................................................................................................. 28 Iraqi Energy Resources.............................................................................................................................................. 28 Iraqi Oil Production ................................................................................................................................................... 29 Iraqi Energy Export Capabilities ............................................................................................................................... 32 Iraqi Gas Development .............................................................................................................................................. 33 Iraq’s Future Energy Development Plans .................................................................................................................. 33 Iraqi Energy Risks ..................................................................................................................................................... 34 Iran.................................................................................................................................................................................. 37 Iranian Energy Resources .......................................................................................................................................... 37 Iranian Efforts to Expand Oil Production and Exports .............................................................................................. 38 Iranian Oil Production Goals and Investment Requirements ..................................................................................... 39 Recent Iranian Oil Development Deals ..................................................................................................................... 40 Caspian Energy Issues ............................................................................................................................................... 42 Iranian Energy Export Capabilities............................................................................................................................ 42 Iranian Gas Development .......................................................................................................................................... 44 Iranian Gas Pipelines and Transport Issues ............................................................................................................... 45 Iran as an Energy Risk............................................................................................................................................... 46 Kuwait............................................................................................................................................................................. 47 Kuwait’s Uncertain Oil Development........................................................................................................................ 48 Kuwaiti Refining and Petrochemicals....................................................................................................................... 51 Kuwaiti Energy Export Facilities............................................................................................................................... 52 Kuwaiti Gas Development......................................................................................................................................... 53 Copyright Anthony H. Cordesman, all rights reserved, Copyright Anthony H. Cordesman, all rights reserved. May only be quoted, excerpted, or referenced with the author’s written permission. Energy Developmets in the Middle East 3/16/04 Page iv Kuwait as an Energy Risk.......................................................................................................................................... 53 The United Arab Emirates .............................................................................................................................................. 54 UAE Oil Development .............................................................................................................................................. 55 UAE Refineries and Petrochemicals.......................................................................................................................... 56 UAE Natural Gas Development................................................................................................................................. 56 The UAE as an Energy Risk .....................................................................................................................................