The Middle East includes five of the top ten oil-producing countries and is responsible for producing about 27% of global production. While public companies produce much of the oil, many international oil companies engage in oil production and related activities in the Middle East through joint ventures, production sharing agreements and other Business plans.
1. Saudi Arabia
Saudi Arabia produces nearly 12 million barrels of oil per day and almost 12% of world production.The country ranked as the largest oil producer during the decade from 2003 to 2012, after which it fell to second place due to increased oil production in the United States. Saudi Arabia remains the world’s largest oil exporter. With oil reserves of about 337 billion barrels and relatively low production costsSaudi Arabia is expected to maintain its position among the top three oil producers for the foreseeable future.
Key points to remember
- Many of the largest oil producers are in the Middle East, including Saudi Arabia, the United Arab Emirates and Iraq.
- Saudi Arabia is the world’s largest oil producer and accounts for around 15% of global production.
- Iraq has increased its production since the end of the Iraq war and is now the second largest producer in the Middle East.
- Iran is one of the world’s largest oil producers, but production is below potential due to economic sanctions.
- Kuwait is the world’s ninth-largest producer, producing between 2.5 and 3 million barrels per day for more than a decade.
Saudi Arabia oil and gas industry is controlled by Saudi Aramco, which is controlled by the Saudi Ministry of Petroleum and Mineral Resources and the Supreme Petroleum and Minerals Council. Saudi Aramco is mostly state-owned, but had a initial public offering (IPO) of 1.5% of the company in December 2019.
Meanwhile, although international oil companies are not involved in oil production in Saudi Arabia, several partners with Saudi Aramco in joint venture refineries and petrochemical plants in the country – partners include Exxon MobilRoyal Dutch Shell PLC, Sumitomo Chemical Co. and Total SA
The number of barrels of crude oil produced each day in the world as of 2020.
Iraq produces around 4.8 million barrels of oil per day and is the world’s sixth largest producer. The country has made substantial production gains since 2005, two years after the start of the war in Iraq. However, the country faces challenges that could limit production towards these goals, including political instability, ongoing violence and insufficient Infrastructure.
Oil production in most of Iraq is under the control of the Oil Ministry in Baghdad.The ministry operates through several state-owned companies, including the North Oil Company, Midland Oil Company, South Oil Company, and Missan Oil Company. In the autonomous region of Iraqi Kurdistan, oil production is controlled by the local Ministry of Natural Resources.
More than a dozen major international oil companies are involved in Iraqi oil production. American and European oil majors include Exxon Mobil, Occidental Petroleum, BPRoyal Dutch Shell and Total SA Other international oil giants in Iraq include the China National Petroleum Corporation, known as CNPC; China National Offshore Oil Corporation, known as CNOOC; Petroliam Nasional Berhad of Malaysia, known as Petronas; and Gazprom Neft OAO.
3. United Arab Emirates
The United Arab Emirates (UAE) is a federation of seven emirates, including Dubai and the capital of the federation, Abu Dhabi.The UAE produces just over 4 million barrels per day to rank seventh among world producers. Each of the seven emirates controls oil production within its borders. However, Abu Dhabi hosts most of the proven oil reserves in the territory of the United Arab Emirates and, therefore, it plays an outsized role in establishing the oil policy of the federation.
The state-owned Abu Dhabi National Oil Company (ADNOC) controls oil production operations in Abu Dhabi under the direction of the emirate’s Supreme Petroleum Council. Most of the oil production in Abu Dhabi is organized under production sharing agreements between ADNOC and international oil companies. Other emirates use production sharing agreements and similar service contracts to organize oil production. Some of the biggest international companies involved in oil production in the UAE include BP, Royal Dutch Shell, Total SA and ExxonMobil.
Iran is the ninth-largest oil-producing country in the world, producing nearly 3.2 million barrels a day, but the effects of economic sanctions on Iran have kept production levels below their true potential . According to the United States Energy Information Administration (EIA), the sanctions have had particularly serious effects on upstream oil and gas investments, including many canceled investment projects.
In July 2015, Iran reached an agreement with the permanent members of the UN Security Council and Germany on the Joint Comprehensive Plan of Action (JCPOA), in which Iran agreed to strictly limit its nuclear program in exchange for the suppression of international forces. economic sanctions. However, the US pulled out of the deal in 2018 after former President Donald Trump kept his campaign promise to quit the JCPOA, which he called a “disaster” and “the worst deal ever.” time”. Then, in 2019, the United States imposed additional economic sanctions in response to a drone attack on an oil facility in Saudi Arabia, which US officials blamed on Iran.
Oil and gas production in Iran is controlled by the National Iranian Petroleum Company (NIOC) under the direction of the Supreme Energy Council. While Iran’s constitution prohibits private or foreign ownership of the country’s natural resources, international companies have historically participated in oil exploration and development in the country through redeem contracts, a model contract that does not confer participation rights on the international company.
Kuwait produces nearly 3 million barrels of oil per day, putting it right in the top 10 oil producers in the world.It maintained constant production of around 2.5 million to 3 million barrels per day, but, according to the EIA, Kuwait struggled to increase production to 4 million barrels per day during this period, failing due to a foreign investment and related delays in new oil production projects.
The Ministry of Petroleum implements petroleum policy in Kuwait through the state-owned Kuwait Petroleum Corporation and its subsidiaries.International oil companies have long been denied access to Kuwait because the Kuwaiti constitution does not allow foreign companies to hold interests in Kuwaiti natural resources or revenues associated with those resources. It means standard joint ventures and production sharing agreements used in other countries are prohibited in Kuwait.
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