$80B plan to raise oil
output
Faiz Al-Mazroui, Arab News
Saudi Arabia is planning to invest $80 billion in increasing its oil output to 12.5 million barrels per day and expanding its refining capacity by 43 percent to six million bpd within the next few years, according to an economic report unveiled yesterday.
The report, which was issued by the Federation of GCC Chambers of Commerce and Industry, expects that the gross GCC domestic product will grow by 27.9 percent this year to reach $1 trillion with the increase in oil prices.
The federation believes that the Gulf Cooperation Council of Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain and Oman will achieve a 31.2 percent surplus in their current accounts in 2008, compared to 28 percent last year.
The report said growing oil prices would boost GCC economies and their investments in infrastructure, tourism and real estate development projects. �We also expect tremendous growth in the industrial and service sectors,� it added.
The federation estimated non-Saudi GCC investments in oil in the coming years at about $170 billion. The report said the GCC countries would achieve a growth rate of 7.5 percent, adding that this would increase investment in non-oil sectors. The report predicted a world economic growth rate of 3.7 percent this year compared to 4.9 percent last year and it does not expect any change in 2009. The prediction was made on the basis of price levels at the end of 2007. The report said the GCC would continue to face inflationary pressure as long as currencies of the member states are linked to a weak US dollar, given the tendency of the Federal Reserve to cut interest rates further.
�At the same time, any move by GCC countries to change their dollar-peg policy would have a negative effect on their plan to establish a monetary union by 2010,� the report said without elaborating. It urged the GCC governments to introduce the monetary union without delay. The federation said that calls for reducing government spending would affect investments in housing and other service projects. It also stressed the need for earmarking some wealth from oil sales for the welfare of future generations.
Source: Arab News
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