SG - English 2002

______________________________________________________________________________
THE MINISTERIAL COUNCIL
H.E. Dr. Chakib Khelil People’s Democratic

Republic of Algeria
H.E. Shaikh Issa bin Ali Al Khalifa Kingdom of Bahrain
H.E. Eng. Samih Samir Fahmy Arab Republic of Egypt
H.E. Dr. Amer Mohammed Rasheed Republic of Iraq
*
H.E. Shaikh Ahmad Fahad Al-Ahmad Al Sabah State of Kuwait
H.E. Dr. Abdul Hafeez M. Al-Zulaitni Great Socialist People’s

Libyan Arab Jamahiriyah
H.E. Abdullah bin Hamad Al-Attiyah State of Qatar
H.E. Eng. Ali bin Ibrahim Al-Naimi Kingdom of Saudi Arabia
H.E. Dr. Ibrahim Haddad Syrian Arab Republic
H.E. Obeid bin Seif Al-Nasseri United Arab Emirates
* Succeeded H.E. Dr. Khalid Adel Al Subaih in February 2002.
III
______________________________________________________________________________
THE EXECUTIVE BUREAU
Mr. Mohammed Meziane People’s Democratic

Republic of Algeria
Mr. Rashed Hassan Al-Dhubaib Kingdom of Bahrain
Mr. Sherif Ismail Mohammad Arab Republic of Egypt
Mr. Kamil Ja’afar Oudah Republic of Iraq
Mr. Abbas Ali Naqi State of Kuwait
Mr. Fathi Mohammed El-Abbar Great Socialist People’s

Libyan Arab Jamahiriyah
Mr. Salem Buti Al-Naimi State of Qatar
Dr. Khalid Mansour Al-Aqeel Kingdom of Saudi Arabia
Dr. Youssef Hossamo Syrian Arab Republic
Mr. Nasser Mohammed Al-Sharhan United Arab Emirates
V
______________________________________________________________________________
THE JUDICIAL TRIBUNAL
Mr. Faris Abdul Rahman Al-Wagayan President
Mr. Mohammed Ali Al-Jady Vice-President
Dr. Moustafa Abdul Hayy Al-Sayed Member
Shaikh Abdul Rahman bin Jaber Al Member

Khalifa
Mr. Jawad Omar Al-Sakka Member
Dr. Nabil Abdullah El-Araby Member
Mr. Khalifa Daalouj Al-Kobaissi Member
Dr. Riad Rashad Al-Daoudi* Registrar
______________________________________________________________________________
* Until 11/10/2002.
VII
______________________________________________________________________________
THE GENERAL SECRETARIAT
Mr. Abdul Aziz A. Al-Turki Secretary General
The Arab Center for Energy Studies

Dr. Mohammed Mukhtar Al-Lababidi Director of the Technical Affairs
Department
Dr. Jamil Mohammed Taher Director of the Economics Department
Mr. Mohammad Osman Al-Nijoumi Acting Director of the Information and

Library Department
_____________________________ Director of the Finance and*

Administrative Affairs Department
* The Finance and Administrative Affairs

Department is currently under the supervision
of the Secretary General
V
Contents xi
CONTENTS
PREFACE ……...……………………………………..............................………… 1
PART ONE
INTERNATIONAL DEVELOPMENTS
IN OIL AND ENERGY
CHAPTER ONE: DEVELOPMENTS IN GLOBAL MARKETS AND THEIR

IMPACT ON OAPEC MEMBER COUNTRIES
Foreword……………………………………………...….……………………….… 3
I. Major Developments in the World Oil Market in 2002 and Related
Factors…………………………………….………….…....…………………… 4
1. Supplies…………………………………….……………..……………….. 4
2. Demand……………………………………………………...………..…… 6
2-1 OECD Countries…………................................................................ 9
2-2 Developing Countries……………………………………..…….…. 10
2-3 Countries in Transition……………………………………….…….... 11
3. Prices of Trends ……….……...…..…..………….…..…….……………. 12
4. Oil inventories………………….………………………………………... 14
II. Petroleum Export Revenues of OAPEC Member 16
Countries………..….
III. Developments in Oil and Energy Consumption in the Arab
Countries………………………….……………….….….….…..……….…... 17
1. Arab Countries……..…………………..………………….….…..……… 17
1-1 Total and Per Capita Energy Consumption……..…….…..…...…… 17
1-2 Energy Consumption by Sources…….……..…....…..…..….……… 18
1-2-1 Petroleum Products………………………………………….. 21
1-2-2 Natural Gas………...……………………….…..………………. 21
1-2-3 Hydroelectricity…………………..………….…..……………… 22
1-2-4 Coal……...………….…..……………………….……………….. 23
2. OAPEC Member Countries..…….……………….………….….……… 23
2-1 Total and Per Capita Energy Demand..........…………..…………… 23
2-2 Energy Consumption by Source...……………...……………....…… 24
2-2-1 Petroleum Products.……….……….……….…..……………… 25
2-2-2 Natural Gas…..……………..…..……………………….……… 26
3-2-2 Hydroelectricity and Coal...…………....………………………. 28
3. Final Energy Consumption in Arab Countries……...……………… 28
3-1 Final Energy Consumption by Source...………………….………… 28
3-1-1 Final Consumption of Petroleum Products….……………... 28
xii Contents
3-1-2 Final Consumption of Natural Gas………….………………… 28

3-1-3 Final Consumption of Electricity………..…………………….. 29
3-2 Final Energy Consumption by Sector…............……………………. 29
3-2-1 Energy Consumption in the Industrial Sector…………..……. 29
3-2-2 Energy Consumption in the Transport Sector…….………… 30
3-2-3 Energy Consumption in Other Sectors of the Economy….….. 30
4. Energy Consumption Forecasts for the Arab Countries……….. 30
4-1 Consumption Forecasts for Petroleum Products in the Arab
Countries …………………………………...…………….…… 31
4-2 Natural Gas Consumption Forecasts in the Arab Countries…..... 31
4-3 Consumption Forecasts for Other Sources in the Arab Countries. 31
5. Domestic Prices………………………………………………………….. 32
CHAPTER TWO: ARAB AND WORLD DEVELOPMENTS IN THE

EXPLORATION, RESERVES AND PRODUCTION
OF ENERGY RESOURCES
I. Oil and Gas…….………..……….…………….……………………………… 48
1. Exploration and Production: An Overview……..………...………. 48
1-1 Seismic Surveys……...……………………….…………….……….... 51
1-2 Exploratory and Developmental Drilling…….................................. 52
2. Oil and Natural Gas Reserves………....……….……………….……… 57
2-1 Oil Reserves………..……………....………………………….……… 57
2-2 Natural Gas Reserves……………..………………….……………… 61
3. Hydrocarbon Liquids and Natural Gas Production…...………….. 64
3-1 Hydrocarbon Liquids Production…….……...………………….… 64
3-1-1 Oil Production……………………………………..……………….. 64
3-1-2 NGL Production in OAPEC Members and the World.................. 67
3-2 Natural Gas Production…………………....………………….……… 68
II. Coal………..……………..………………….……….…………….…………… 72
1. World Developments………………………………………..…………… 72
III. Nuclear Energy………………………..……..……….………….….………… 74
IV. Renewable Energy Sources…..…….........………..….….…..……….……… 75
1. Hydropower…..….……….…….……...…………………………….…… 76
2. Wind Power…...……..……………………...…….……………………… 78
3. Solar Power.........................................................……………………..…. 79
4. Geothermal Power.………….…………..…………….…………….…… 80
5. Tidal Power……………………………………………………..………… 82
Contents xiii
CHAPTER THREE: ARAB AND WORLD DEVELOPMENTS IN PETROLEUM

DOWNSTREAM INDUSTRIES
I. Refining Industry…………………………………..……….…………….…... 104
1. World Developments………………….……..……….………………….. 104
2. Arab Developments………………..……….……………………………. 109
II. Petrochemical Industries…………..…………...….….……….…………….. 113
1. World Developments…………….……..…….………………………..… 113
2. Arab Developments………….….……….………………………………. 114
III. Natural Gas Consumption, Trade and Processing………...….……….. 117
1. World Developments….……..……….………………………………….. 117
1-1 Natural Gas Consumption……………..………………….…………. 117
1-2 Natural Gas Trade…………..………………….……………….……. 118
1-3 World Natural Gas Prices……………………………………………. 121
2. Arab Developments…………………..……….…………………………. 121
PART TWO
OAPEC ACTIVITIES IN 2002
CHAPTER ONE: THE MINISTERIAL COUNCIL AND THE EXECUTIVE

BUREAU
I. The Ministerial Council…..………….……………….………...……….…… 141
II. The Executive Bureau…….……….………………...………….....……….… 141
CHAPTER TWO: THE GENERAL SECRETARIAT

I. The Data Bank and Related Activities.…….……...………………….…… 142
1. OAPEC Data Bank………….…………………..…..…….…………...… 142
2. Information and Library Services………….…………...…………... 145
3. Studies, Papers, and Reports…………….………....……….……..… 157
3-1 Forecast of Energy Consumption in the Arab Countries ………... 147
3-2 Arab Cooperation in the Field of Natural Gas and Oil….………. 148
3-3 Future and Economics of Alternative Transport Fuels….……….. 148
3-4 Out look of World Oil Demand Until 2010 and their Impact on
the Production of Member Countries ………………..…………… 149
3-5 Natural Gas Grids among Arab Countries...................................... 150
3-6 A Study on the “UN Framework Convention on Climate
Change UNFCCC: historical background and developments”… 151
xiv Contents
II. Arab and International Cooperation…………………………………….. 152
1. The Seventh Arab Energy Conference………………………….…..… 152
2. Seminars and Meetings Organized by General Secretariat…….…. 165
3. Conferences, Seminars and Meetings Attended by the General

Secretariat….………………………………..………….………….….…… 165
3-1 The Economic and Social Council Session; Follow-up of the

Progress of Work in the Greater Arab Free Trade
Area……………………..…… 165
3-2 Sixth Meeting of Experts from Energy Exporting and Importing
Countries…………….……………………………………….……..……… 166
3-3 Experts’ Meeting on the Results of the Fourth Ministerial
Conference of the World Trade Organization and the Preparation for
the Forthcoming Negotiations…….…………………..……………...…... 167
3-4 Experts Meeting on Capacity Building and Regional Integration for
Developing a sustainable Energy Sector in ESCWA Countries………. 168
3-5 Seminar on the Impact of the World Trade Agreements on the
Industrial Sector for GCC States ………………………………………... 168
3-6 The Higher Coordination Committee For Joint Arab Action................. 169
3-7 Oxford Energy Seminar …………………………………………………. 170
3-8 The Eight International Energy Forum………………………..………… 171
3-9 First Conference on “Developing Gas Markets in the Arabian Gulf
Area”………………………...……………………………….…………….. 172
3-10 Third European Fuel Conference ……………………………………… 173
3-11 First Syrian Oil and Gas Symposium.…….…...…..…..…………….… 173
3-12 Seminar on Oil Spills-Prevention and Control…..……………………. 174
3-13 Meeting of the Executive Bureau of the Council of Arab Ministers
Responsible for the Environment……………………...……………….. 175
3-14 Oil, Energy and Gas Conference: Perspectives of the Near East
Region……………………………………………...……………………... 175
3-15 High-Ranking Arab Official’ Preparatory Meeting for the
Participation in the World Summit for Sustainable Development…... 176
3-16 Tenth Abu Dhabi International Petroleum Exhibition and
Conference ADIPEC 2002…………….……………………….……… 176
3-17 The 14th Session of the Council of Arab Ministers Responsible for
Environmental Affairs and it’s Executive Bureau and the Meeting
of the General Assembly of the Joint Committee on the
environment and Development…………………...…………………… 177
3-18 Eighth Session of the Conference of the Parties to the United
Nation Framework Convention on Climate Change ……… 178
Contents xv
4. The Unified Arab Economic Report…………….…………………… 179
III. Energy Resources Monitor-Arab and International…………………… 180

IV. Encouragement of Scientific Research……..…………..….………...…… 180
V. Supporting Activities…………………………………………..……………. 182
1. Media Activities……….…….……….………….……………….……… 182
1-1 Editing, Printing, Publishing, and Distribution…..….…...….…… 182
1-2 Press and Media………………….…………………….……………. 182
1-3 Twenty-sixth Arab Book Fair………….…………..…………….. 182
2. Administrative and Financial Activities……………...………..….. 183
2-1 Evolution of the Administrative Structure…………….….…….… 183
2-2 Evolution of Expenditure…….…..……………..….…….………… 183
CHAPTER THREE: OAPEC-SPONSORED VENTURES
I. The Arab Maritime Petroleum Transport Company.......………........ 187

II. The Arab Shipbuilding and Repair Yard Company…............………… 189
III. The Arab Petroleum Investments Corporation.................…………...… 191
1. Arab Company for Detergent Chemicals………………...………… 194
IV. The Arab Petroleum Services Company.........…...……………...…...... 195
1. Arab Drilling and Workover Company.............…………….…..….. 195
2. Arab Well Logging Company………………………………………. 196
3. Arab Geophysical Exploration Services Company…….………. 197
APPENDICES
I. Press Releases of OAPEC Ministerial Council Meetings in 2002……. 198

II. Meetings and Seminars Sponsored, or Attended by the General
Secretariat in 2002….…......………………………………………...……… 199
xvi Contents
TABLES
PART ONE
CHAPTER ONE
1-1 OPEC Production After Quota Reductions in 2002 ……………….. 36

1-2 Annual Changes in World Oil and NGLs Supply, 1998-2002 ..... 37
1-3 World Economic Growth, 1998-2002……………………………….. 38
1-4 Growth in the World Economy and Oil Demand by Region, 1998-
2002…………………………………………………………………….. 39
1-5 Total & Annual Change in World Oil Demand, 1998-2002 ……… 40
1-6 World Oil Demand by Region, 1998-2002………………………… 40
1-7 Total & Annual Change in Oil Demand in OECD Countries,
1998-2002…………………………………………………………….. 41
1-8 Total & Annual Change in Oil Demand in Developing
Countries,1998-2002…………………………………………….…... 42
1-9 Total & Annual Change in Oil Demand in Countries in
Transition, 1998-2002……………………………………………… 43
1-10 Spot Price of OPEC Basket of Crudes, 1998-2002………………. 44
1-11 Average Spot Prices of the OPEC Basket and Selected Arab
Crudes, 1998-2002 …………………………………………………... 45
1-12 Nominal and Real Prices of Crude Oil, 1970-2002……………….. 46
1-13 OECD Commercial Oil Inventories at Quarter End, 2001-2002.... 47
1-14 Value of OAPEC Oil Export in Current and Real Prices, 1970-
2002……………………………………………………………. 48
1-15 Petroleum Revenues in OAPEC Member Countries, 1998-2002... 49
1-16 Per Capita Petroleum Revenues in OAPEC Member Countries,
2001 and 2002………………………………………………. 50
1-17 Energy Consumption in the Arab Countries, 1998-2002…… 51
1-18 Per Capita Energy Consumption in the Arab Countries, 1998 and
2002……………………………………………………………… 52
.
1-19 Energy Consumption in OAPEC Member Countries, 1998-2002. 53
1-20 Energy Consumption in OAPEC Member Countries by Source,
1998-2002………………………………………………………... 54
1-21 Petroleum Products’ Consumption in OAPEC Member
Countries, 1998-2002……………………………….. 55
1-22 Natural Gas Consumption in OAPEC Member Countries, 1998-
2002…………………………………………………………. 56
Contents xvii
1-23 Hydroelectricity Consumption in OAPEC Member Countries,

1998-2002………………………………………………………... 57
1-24 Coal Consumption in OAPEC Member Countries, 1998-2002… 57
1-25 Relative Distribution of Final Energy Consumption According
to Sources and Sectors in OAPEC Member and Other Arab
Countries in 2000……………………………………………… 58
1-26 Forcast of Energy Consumption in the Arab Countries………… 59
1-27 Domestic Prices of Petroleum Products in OAPEC Member
Countries, 2002…………………………………………………. 60
1-28 Domestic Prices of Petroleum Products in OAPEC Member
Countries, 2002…………………………………………………. 61
CHAPTER TWO
2-1 Seismic Surveys in OAPEC Members and Other Arab Countries,

1998-2002……………………………………………………………… 86
2-2 Active Drilling Rigs in OAPEC Member Countries and the
World,1998-2002……………………………………………………… 87
2-3 Exploratory and Developmental Wells Drilled in OAPEC
Members and Other Arab Countries, 1998-2002………………… 88
2-4 Exploratory and Developmental Drilling in OAPEC Members and
Other Arab Countries, 1998-2002…………………………………. 89
2-5 Petroleum Discoveries in OAPEC Members and Other Arab
Countries, 1998-2002…………………………………………………. 90
2-6 Arab and World Oil Reserves, 1998-2002………………………….. 91
2-7 Arab and World Natural Gas Reserves, 1998-2002 …………… 93
2-8 Arab and World Hydrocarbon Liquids Production, 1998-2002… 95
2-9 NGL Production in OAPEC Members and Other Arab Countries,
1998-2001 ……………………………………………………………... 97
2-10 Arab and World Natural Gas Production, 1998-2001 ................… 98
2-11 Arab and World Marketed Natural Gas Production, 1998-2001…. 100
2-12 World Coal Reserves, 1998-2001………........................................... 102
2-13 World Coal Production, 1997-2001.................................................... 103
CHAPTER THREE
3-1 World Installed Refining Capacity by Region, 2001 and 2002 129
……
3-2 World Catalytic Conversion Capacity by Region, 2001 and 2002.. 130
3-3 Installed Refining Capacity in the Arab Countries, 1998-2002........ 131
3-4 World Ethylene Capacity by Region, 2000 - 2001………………. 132
3-5 Consumption of Natural Gas by Region, 2000 and 2001………….. 133
xviii Contents
3-6 Share of Natural Gas in the Total Consumption of Commercial

Energy by Region, 1999-2001……………........................................ 134
3-7 Natural Gas Exports by Region, 2000 and 2001…………………. 135
3-8 Natural Gas Exports by Region, 2000-2001…………………….... 136
3-9 Natural Gas Exports in Arab Countries 1997-2001……………… 137
3-10 World Natural Gas Prices, 1997-2001…………………………….. 138
PART TWO
CHAPTER ONE
5-1 Publications Issued and Distributed by the General Secretariat in
2002................................................................................... 184
5-2 General Secretariat Employees, 1968-2002............................... 185
5-3 General Secretariat Actual Expenditure by Budget Category,
1968-2002........................................................................... 186
FIGURES
PART ONE
CHAPTER ONE
1-1 Annual Change in World Supplies of Oil and NGLs, 1998-2002. 5
1-2 World Supplies of Oil and NGLs, 1998-2002…………………... 6
1-3 World Economic Growth Rate, 2001-2002…………..……………. 7
1-4 World Economic Growth and Oil Demand Growth, 1998-2002. 8
1-5 Change in World Oil Demand, 1998-2002………………………… 8
1-6 World Oil Demand by Major Economic Group, 1998-2002……. 9
1-7 OECD Demand for Oil by Region, 1998-2002…………………. 10
1-8 Total Oil Demand in the Developing Countries, 1998-2002…. 11
1-9 Total Oil Demand in the Countries in Transition, 1998-2002…… 12
1-10 Weekly Movement of OPEC’s Basket of Crudes, 2002………. 13
1-11 Crude Oil Prices in Nominal and Real Terms, 1970-2002……… 14
1-12 OECD Oil Inventories at Quarter End, 2001-2002……..……... 15
1-13 US Strategic Reserve at Quarter End, 2001-2002……..………… 15
1-14 Value of OAPEC Petroleum Exports in Current and Real Prices,
1970-2002…………………………………………………………….. 16
1-15 Per Capita Energy Consumption in the Arab Countries, 2002… 18
1-16 Energy Consumption in the Arab Countries by Source, 2002…… 19
1-17 Energy Consumption in the Arab Countries and the World,2001. 20
1-18 The Structure of Energy Consumption in the Arab Countries…… 20
1-19 Oil Consumption in the Arab Countries and the World, 2001…… 21
Contents xix
1-20 Natural Gas Consumption in the Arab Countries and the World,
2001…………………………………………………………………… 22
1-21 Energy Demand in OAPEC Member Countries, 2001-2002…... 23
1-22 Per Capita Energy Consumption in OAPEC Member Countries,
2002............................................................................................. 24
1-23 Energy Consumption in OAPEC Member Countries by Source,
2002…………………………………..........………………………….. 25
1-24 Petroleum Products’ Consumption Mix in OAPEC Member
Countries, 2002……………………………………………….……… 26
1-25 Natural Gas Consumption in OAPEC Member Countries, 1998-
2002…………………………………………………………………… 27
1-26 Member Countries’ Share of Total OAPEC Natural Gas
Consumption, 2002…....................................................................… 27
1-27 Relative Distribution of Final Energy Consumption by Source
and Sector in the Arab Countries, 2002…....................................… 29
1-28 Relative Distribution of Final Energy Consumption by Sector
and Source in the Arab Countries, 2000…………………………… 30
CHAPTER TWO
2-1 Seismic Surveys in OAPEC and Other Arab Countries, 87-2002.. 52
2-2 Active Drilling Rigs in OAPEC Members and Other Arab
Countries, 1998-2002………………………………………………... 53
2-3 Active Drilling Rigs Worldwide, End 2002……………………….. 53
2-4 Exploratory and Developmental Wells Drilled in OAPEC
Member Countries and Other Arab Countries, 98-2002………….. 55
2-5 Exploratory and Developmental Drilling in OAPEC Member
Countries and Other Arab Countries, 98-2002................................ 56
2-6 Oil Discoveries in OAPEC Member Countries and Other Arab
Countries, 1998-2002……………………………………………… 56
2-7 Gas Discoveries in OAPEC Member Countries and Other Arab
Countries,1997-2002………………………………………………… 57
2-8 World Oil Reserves by International Grouping, End 2002…….… 58
2-9 The Evolution of Oil Reserves in OAPEC Member Countries,
1998-2002……………………………………...……………………... 59
2-10 World Natural Gas Reserves, End 2002………..………………..… 61
2-11 The Evolution of Natural Gas Reserves in OAPEC and OPEC
Member Countries, 1998-2002…………………………………… 62
2-12 World Crude Oil Production by International Grouping, 2002… 65
xx Contents
2-13 Oil Production in OAPEC and OPEC Member Countries,1998-

2002…………………………………………………………………… 66
2-14 World Production of Natural Gas by International Grouping,
2001…………………………………………………………………… 69
2-15 Natural Gas Production in OAPEC and OPEC Member
Countries, 1998-2002………………………………………………... 71
2-16 World Coal Reserves, End 2001……………………………………. 73
2-17 World Production of Hard Coal, 2001……………………………... 73
CHAPTER THREE
3-1 World Primary Distillation Capacity by Region, 2002…………… 104

3-2 World Catalytic Conversion Capacity by Region, 2002………….. 105
3-3 Evolution of Primary Distillation Capacity in the Arab
Countries, 1998-2002…………………………………………….. 109
3-4 World Installed Ethylene Capacity, 2002……………………..…… 114
3-5 World Natural Gas Consumption by Region, 2001………………. 117
3-6 Share of Natural Gas in the World Energy Balance, 1999-2001… 118
3-7 World Natural Gas Exports by Region, 2001…………………… 119
3-8 World Natural Gas Exports, 2000-2001…………………………… 120
3-9 Arab Natural Gas Exports by Country,2001………………….…… 120
3-10 Average World Prices of Natural Gas, 1997-2001………………... 121
PREFACE
At the time of publishing this 2002 Report, the Arab region is

experiencing extremely difficult circumstances. The current period is one of
the most complex and precarious times witnessed and many are monitoring
the situation and trying to find indicators to help understand what is going
on. As an organization involved in joint Arab action in the Arab region, we
at OAPEC hope the situation will settle so that the aspirations of the people
are realized and they can utilize their natural resources optimally so as to
achieve socioeconomic prosperity. This will require positive Arab
cooperation within the context and the realities of the international
situation, which we hope will be favorable for achieving the desired goal.
It gives me pleasure to present this Report, which reviews Arab and

international developments in the oil and energy industry in 2002. It shows
that, in contrast to 2001, the oil market in 2002 was relatively stable,
because prices stayed within OPEC’s agreed range of $22 - $28 per barrel.
Official output levels of OPEC members conformed with designated
quotas, and non-OPEC producers cooperated positively, particularly in the
first half of the year.
Part One of the Report looks at international developments in oil and

energy and events affecting the world oil market in 2002, with particular
emphasis on the main features of the market and prevailing trends. It also
examines oil and energy consumption in the Arab region and worldwide
and discusses price trends and their impact on petroleum export revenues of
OAPEC member countries.
Also included in Part One are Arab and international development in

the exploration and production of various energy sources, but especially oil
and gas and their reserves. Moreover, it considers Arab and international
downstream industries such as refining and petrochemicals.
Part Two of the Report reviews OAPEC activities in 2002, starting
with the meetings of its Ministerial Council and Executive Bureau. It moves
on to OAPEC studies and the seminars, meetings, and conferences
convened or attended by the General Secretariat. Perhaps the most
prominent of these was the Seventh Arab Energy Conference (AEC)
convened in Cairo, 11-14 May 2002. The AEC provides the framework for
discussing the various issues related to energy in order to formulate a
congruent viewpoint on the local, regional, and international levels. The
reader will find in the Report a summary of the studies that the General
Secretariat presented at the conference. This section also includes a report
on the achievements of the OAPEC-sponsored ventures.
In conclusion, we hope that prosperity and strength will prevail in our

Arab Nation, so that the peoples of the region can realize their aspirations
and goals.
Abdul Aziz A. Al-Turki

Secretary General
PART ONE
INTERNATIONAL DEVELOPMENTS
IN OIL AND ENERGY
CHAPTER ONE
DEVELOPMENTS IN GLOBAL MARKETS AND

THEIR IMPACT ON OAPEC MEMBER COUNTRIES
FOREWORD
Despite the relative instability in the oil market in 2002, the market’s
main features gave a different impression. Prices remained stable within the
range agreed by OPEC members throughout the year, official output levels
remained unchanged from the start of the year, and the global economy
performed moderately well. The stability may be attributed to OPEC’s
assiduous monitoring of the oil market and intervention, whenever
necessary, to ward off undue deviations that would harm the interests of all
players in the oil industry and thereby maintain the stability that everyone
desires.
The price drop in the last quarter of 2001 to below the $18/barrel
threshold prompted OPEC members to start 2002 with a 1.5 million b/d cut
in output, bringing official quotas to 21.7 million b/d. In order to keep
prices stable at levels that suit both producers and consumers, it was
emphasized more than once in the course of the year that production levels
would remain unchanged.
The fruits of those prudent decisions quickly became apparent as non-
OPEC producers demonstrated their cooperation in the first half of 2002
and prices started to pick up in March. Thereafter they remained within
OPEC’s target price range of $22-$28 per barrel.
Throughout the year individual countries continued to try and raise
their economic growth rates above the low level of 2001. Economic
recovery efforts, particularly in the industrial countries, focused on
lowering interest rates, but they only had limited success. There was a slight
improvement in global economies generally and the US economy in
particular in 2002 following the wave of recession that had prevailed the
previous year, especially in the wake of 9/11. The improvement was
accompanied by a slight growth of about 200,000 b/d in world oil demand.
3
4 Development in Global Markets
In 2002 the economic state of the world’s main oil consuming regions,
namely the industrial countries, was worse than that forecast in the
preceding year. The growth rate of the three main industrial areas, namely
the USA, Japan, and Europe, was no more than 1.7% in 2002, which can
not be considered encouraging for growth in oil demand. The most notable
phenomenon in the last quarter of 2002 was a surplus of oil supplies that
resulted from the increased output of non-OPEC producers and the above-
quota output of some OPEC members.
When the global supply/demand balance became discernable, OPEC
members took the unprecedented step at the end of 2002 to raise official
output quotas by 1.3 million b/d to 23 million b/d from the beginning of
2003.
It should be noted that the official output levels approved by OPEC
members were the lowest in ten years. They had a significant impact on
member countries’ oil revenues, which fell from their 2001 level despite the
improvement in crude oil prices.
In this Report oil and energy consumption developments in the Arab
countries in general and OAPEC member countries in particular will be
evaluated. The Report will show that in the period 1998-2002 there was a
slowdown in energy consumption growth rates, which fell from 5.6% in
1998 to 2% in 2002. During this period, the share of natural gas in total
energy consumption rose from 39.5% in 1998 to 42.4% in 2002, while the
share of petroleum products declined from 56.7% to 54.4%.
In order to give a more comprehensive idea of all developments in the
world oil market in 2002 and related factors, this chapter will focus on basic
features of the world oil market, their impact on the petroleum revenues of
OAPEC member countries, as well as a review of oil and energy
consumption developments in the Arab countries.
I. MAJOR DEVELOPMENTS IN THE WORLD OIL MARKET

IN 2002 AND RELATED FACTORS
This section reviews in more detail the main features of the oil market,
the prevailing factors in 2002, and their impact on the market.
1. Supplies
OPEC member states began 2002 by cutting their official output
quotas by 6.5%, or 1.5 million b/d, which reduced their total production to
21.7 million b/d, their lowest level in ten years, as shown in Table (1-1).
Factors Affecting the Oil market 5
The objective was to bolster prices, which had begun to slump in the
aftermath of the events of 11 September 2001 when the global economy
deteriorated and consequently world demand for oil declined.
Non-OPEC producers responded to OPEC’s call for more
cooperation. Angola, Mexico, Norway, Oman, and Russia implemented
cuts totaling 462,500 b/d. The compliance of OPEC and non-OPEC
producers with their agreed cuts served to boost prices. OPEC’s basket of
prices rose 50%, from $18.3/b in January 2002 to $27.4/b in September.
As a result of constantly monitoring the state of the world oil market,
OPEC countries confirmed that production quotas would remain at the 21.7
million b/d level. The first time was at the end of the first quarter and the
last at the end of the third quarter. At the end of 2002 the OPEC countries
adopted a different measure when they agreed to raise the official output
quota ceiling by 1.3 million b/d to 23.0 million b/d.
The decision to cut output that came into effect at the beginning of
2002 had a clear impact on OPEC’s share of total world supplies of oil and
natural gas liquids (NGLs). In 2002 it lost 2.3% of its share to non-OPEC
producers, leaving it with a 37.1% share compared with 39.4% in 2001.
In this way the OPEC countries’ production of crude oil and NGLs
declined, including that of Iraq, which is not subject to the quota system, by
2.0 million b/d in 2002, or 6.6% compared to the 2001 level, to stabilize at
28.3 million b/d. Meanwhile, non-OPEC output rose by 1.4 million b/d, or
3.0%, to 47.9 million b/d, as shown in Figure (1-1) and Table (1-2).
Figure 1-1
Annual Change in World Supplies of Oil and NGLs, 1998-2002
(Million b/d)
1.5
1
0.5
0
-0.5
-1
-1.5
-2
1998 1999 2000 2001 2002
OPEC Rest of the World

Non-OPEC production was characterized by a substantial leap in the

level of supplies from former USSR countries, which accounted for over
50% of the global increase. Their production rose by about 730,000 b/d to
9.3 million b/d in 2002. The industrial countries’ share, on the other hand,
only accounted for 10% of the increase in non-OPEC supplies. Their output
rose by 140,000 b/d, or less than 1%.
Total world supplies, from OPEC and elsewhere, fell by 600,000 b/d,
which was no more than 0.8% lower than in 2001, to 76.2 million b/d, as
shown in Figure (1-2) and Table (1-2). The factors behind the drop in world
supplies during 2002 included the general strike in Venezuela, the world’s
fifth biggest oil exporter, which resulted a reduction in its output to very
low levels estimated at just 600,000 b/d.
Figure 1-2
World Supplies of Oil and NGLs, 1998-2002
(Million b/d)
78
76
74
72
70
1998 1999 2000 2001 2002
2. Demand
The US economy managed to survive the repercussions of 9/11 owing
to the good performance of the information technology sector. It achieved
an annual growth rate of about 2.2% in 2002, compared with 0.3% in 2001.
The shortest period of recession in US history was thus brought to an end.
Since the performance and recovery of other economies is closely
linked to growth rates in the US economy, the world economy in general
showed a moderate growth rate of about 2.8% in 2002, compared with
2.2% in 2001.
Perhaps the improved performance of the US economy was a major

factor in the significant recovery in the Asian economies’ performance,
which recorded a growth rate of 6.1% compared with 5.6% in 2001. The
increased US demand for Asian manufactured goods boosted Asian
exports, which are a basic catalyst for economic recovery in countries of the
region.
In terms of groups, there was a slight increase in the growth rates of
the industrial and the developing countries to 1.7% and 4.2%, respectively,
compared with 0.8% and 3.9% in 2001. At the same time, the economies of
countries in transition recorded a growth rate of 3.9%, which was lower
than their 2001 rate of 5.0%. (similarly, the growth of the Latin American
countries declined to –0.6%, in contrast to the previous year when they
achieved a positive rate, as shown in Figure (1-3) and Table (1-3).
Figure 1-3
World Economic Growth Rate, 2001-2002
(%)
5
4
2.8
3
2.2
2
-1
OECD Countries in Developing Africa Latin World
countries transition countries America
2001 2002
The moderate recovery in the performance of the world economies in

general in 2002 was reflected in oil demand levels, which only rose slightly
by 0.3%. Figure (1-4) and Table (1-4) show the annual growth rates for
world oil demand compared with world economic growth rates.
A significant feature of 2002 was the poor growth in world demand
for oil, which was no more than 200,000 b/d, or 0.3%, whereas in 1999 and
2000 it exceeded 1 million b/d. The 2002 increase brought world demand to
76.5 million b/d.
The 2002 increase in demand was the lowest since 1998, during the
Asian crisis, when it measured 300,000 b/d, as shown in Figure (1-5) and
Table (1-5).
Figure 1-4
World Economic Growth and Oil Demand Growth, 1998-2002
(%)
0
1998 1999 2000 2001 2002
Oil demand growth GDP growth
Figure 1-5
Change in World Oil Demand, 1998-2002
(Million b/d)
1.5
0.5
0
1998 1999 2000 2001 2002
Oil demand trends varied from one group to another. In the industrial
countries demand fell by 100,000 b/d to 47.6 million b/d, while in the
developing countries it rose by 300,000 b/d. In the countries in transition oil
demand remained stagnant at its 2001 level of 4.6 million b/d, as shown in
Figure (1-6) and Table (1-6).
Figure 1-6
World Oil Demand by Major Economic Group, 1998-2002
(Million b/d)
50
40
30
20
10
0
1998 1999 2000 2001 2002
OECD countries Developing countries Countries in transition
The main developments in demand for crude oil are reviewed by

economic grouping below.
2-1 OECD Countries

The OECD countries’ share of world oil use declined in 2002 by 0.3%
to 62.2%, as their demand fell by 100,000 b/d, or 0.2%, to 47.6 million b/d.
While demand in North American countries and Asian industrial
countries remained at its 2001 level of 23.9 million b/d and 8.5 million b/d,
respectively, the utilization in West European countries fell. This was
mainly due to poor performance in their industrial output, as the indicator
of industrial activity in Europe dropped sharply, particularly in Germany
and the UK.
Several other factors contributed to the decline in European demand.
They include the improvement in the weather in the winter of 2002, as
temperatures were on average 20% higher than in 2001. Other factors were
the end of the relative drought in France and Italy, which had reduced their
hydroelectricity production, and the completion of maintenance operations

that had cut France’s nuclear power capacity. Figure (1-7) and Table (1-7)
show demand in the OECD countries.
Figure 1-7
OECD Demand for Oil by Region, 1998-2002
(Million b/d)
30
20
10
0
1998 1999 2000 2001 2002
North America Western Europe Pacific
2-2 Developing Countries

The developing countries continued their role as the main source of
growth in world oil consumption. Their annual growth rate of demand for
oil keeps its upward trend year after year. Demand in these countries in
2002 increased by 300,000 b/d, or 1.3%, to 24.3 million b/d. This group
accounted for most of the increase in global demand and their share of the
world total rose by 0.3% to 31.8% as the expense of the OECD countries.
Within the developing countries there was significant disparity
between regions. While Latin America witnessed no change in its demand
level, which remained at its 2001 rate of 4.7 million b/d, the Middle East
and Africa recorded an increase of 100,000 b/d in their demand, bringing it
to 7.4 million b/d. Most of this increase occurred in the Arab states: Their
demand in 2002 totaled about 3.9 million b/d, which accounted for 16% of
the developing countries’ total consumption.
Oil demand in the Asian developing countries rose by 200,000 b/d to
12.2 million b/d. The Chinese economy, whose annual growth rate of over
7% for the previous six years was the highest worldwide, accounted for all
of the increase in Asian demand. China’s oil demand in 2002 rose by 4.3%
to 4.9 million b/d, which made China the fastest growing in the world in
terms of both volume and growth rate of oil use.
The growth in China’s demand is attributable to the increase in

the refining activity with refining capacity rising to the highest level ever
(over 20%) in 2002. With China’s oil reserves starting to decline, the
country is increasingly dependent on oil imports to meet local consumption.
China depends on Saudi Arabia, its main supplier, for about16% of its
crude oil requirements.
Figure (1-8) and Table (1-8) show total oil demand in the developing
countries.
Figure 1-8
Total Oil Demand in the Developing countries, 1998-2002
(Million b/d)
26
24
22
20
1998 1999 2000 2001 2002
2-3 Countries in Transition

Total oil demand in the countries in transition in 2002 remained at its
2001 level of 4.6 million b/d. Despite a significant increase of 8.6% in the
output of former Soviet Union (FSU) countries, their demand remained at
its 2001 level of 3.9 million b/d.
All the increase in production is exported to the markets of the Far
East so the producing countries can obtain more hard currency, which is the
same trend that prevailed in 2001.
Oil demand in East European countries, which accounts for 15% of
this group’s total, remained at the same level it had recorded since 1999,
namely 700,000 b/d, as shown in Figure (1-9) and Table (1-9).
Figure 1-9
Total Oil Demand in the Countries in Transition,
1998-2002
(Million b/d)
0
1998 1999 2000 2001 2002
FSU Eastern Europe
3. Price Trends
In response to the decline in crude oil prices following the events of

9/11and within the context of its continuing efforts to stabilize the oil
market and achieve sustainable price levels that suit producers and
consumers alike, OPEC confirmed at the end of 2001 that from 1 January
2002 it would cut its total production by 1.5 million b/d.
OPEC members began to reap the fruits of that decision at the
beginning of 2002, when OPEC’s basket of crudes began to rise. It
stabilized within OPEC’s price band of $22-$28/b from March 2002 to the
end of the year.
The monthly price of OPEC’s basket of crudes ranged between $22.6
and $28.4 per barrel.
A weekly review of the price movement in OPEC’s basket shows that
it exceeded the upper limit of $28/b on several occasions, especially in the
last month of the year owing to the general strike in Venezuela, as shown in
Figure (1-10).
The annual spot average for OPEC’s basket came to $24.3/b, which
was $1.2/b, or 5.2%, higher than the 2001 average, as shown in Table
(1-10).
Figure 1-10
Weekly Movement of OPEC’s Basket of Crudes, 2002
($/b)
31
29
27
25
23
21
19
17
November
September
December
March
August
May
October
April
June
January
February
July
Apart from OPEC’s measures relating to output levels aimed at

stabilizing prices, the oil market was subject to several factors that had a
clear impact on boosting prices.
They included:
• Heightened interest in the situation in the Middle East and fear of
disruption in supplies from producers in the region, in addition to the
risk of war, which was estimated to account for $3-$5 per barrel, or
about10% of the price.
• The suspension of Iraqi exports for one month during the year.
• Instability in Venezuela towards the end of 2002, which stopped some
of its oil exports, most of which go to the US market.
The spot price levels of various Arab crude oils recovered well in
2002 and increased by between $0.7 and $4.4 per barrel over 2001 prices,
as shown in Table (1-11).
The increase in real 1995 crude oil prices amounted to about $0.8 per
barrel adjusted by the deflator of GDP in the OECD countries, bringing the
average to $22.1/b in 2002.
The nominal price, on the other hand, increased by about $1.2/b, as
shown in Figure (1-11) and Table (1-12).
Figure 1-11
Crude Oil Prices in Nominal and Real Terms, 1970-2002
($/b)
70
Real 1995 Prices
60
Nominal Price
50
40
30
20
10
0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
4. Oil Inventories
The level of various inventories worldwide in 2002 was linked to the

developments in oil prices and oil demand and supply levels. The 0.7%
decline in demand for oil in the first half of the year and the 11% drop in
prices compared with the first half of the previous year were accompanied
by a rise of 46 million barrels in the level of commercial stocks in the
industrial countries in the first half of 2002.
Initial estimates indicate that demand rose 1% in the second half of the
year, accompanied by a 23.3% rise in price levels compared with the same
period of 2001. Consequently, the level of commercial stocks in the
industrial countries fell 2.7% compared with the end of the previous year to
2512 million barrels, as shown in Figure (1-12) and Table (1-13).
Inventories in other countries rose at the end of the year by 75 million
barrels or 7.3% to 1099 million barrels. Other stocks, such as the oil stocks
on board tankers and the independent stocks at some ports, rose by 14
million barrels, or 1.6%, above their 2001 level.
Total commercial inventories in 2002 amounted to 4526 million
barrels, which was 20 million barrels, or 0.4%, higher than in 2001 and
sufficient for 66.1 days of consumption. The disposable commercial stocks,
which are kept by oil companies to meet any sudden disruption of supplies
or for speculative purposes, remained at their 2001 level of 817 million
barrels. There were sufficient for 11.9 days of consumption at current rates.
Figure 1-12
OECD Oil Inventories at Quarter End, 2001 and 2002
(Million barrels)
2650
2001 2002
2600
2550
2500
2450
2400
First quarter Second quarter Third quarter Fourth quarter
The US strategic reserve, which was established in 1977 and is the

biggest in the world, was built up throughout 2002 until at the end of the
year it stood at 598 million barrels. This was 48 million barrels, or 8.7%,
more than the previous year, as shown in Figure (1-13).
The rise in the US strategic reserve was primarily due to the surplus in
supplies that prevailed in most months of the year that resulted from OPEC
producers exceeding their quotas and a rise in supplies from non-OPEC
producers.
Figure 1-13
US Strategic Reserve at Quarter End, 2001 and 2002
(Million barrels)
600
590 2001 2002
580
570
560
550
540
530
520
510
16 Petroleum Export Revenues of OAPEC Members
II. PETROLEUM EXPORT REVENUES OF OAPEC

MEMBER COUNTRIES
The relative rise in crude oil prices in 2002, which were at least 5%
higher than the previous year, did not boost the petroleum revenues of
OAPEC members when measured in current prices. Indeed revenues
dropped 11.6% below their 2001 level to reach $131.5 billion. The main
reasons for the decline were the fall of over 6% in OAPEC members’
production levels owing to OPEC’s official output quotas remaining
unchanged from the beginning of 2002 at the low level of 21.7 million b/d
and the relative rise in domestic market consumption rates compared with
the previous year.
When calculating revenues in 1995 real terms they declined from
$137.0 billion to $119.5 billion, or by 12.8%, as shown in Figure (1-14) and
Table (1-14).
The decline in revenues varied from one country to another. It ranged
from 2% to 8% in Algeria, Kuwait and Libya and from 11% to 22% in
Bahrain, Qatar, and Saudi Arabia. Increases in petroleum revenues were
recorded in Syria (14.8%), Egypt (5.1%), and Iraq (4.5%), as shown in
Table (1-15).
The overall decline in the petroleum revenues of OAPEC member
countries was reflected in the per capita share of revenues, which fell by
between 9% and 36%, as shown in Table (1-16).
Figure 1-14
Value of OAPEC Petroleum Exports in Current and Real Prices, 1970-2002
($ billion)
450
400
Current Prices
350 Real 1995 Prices

300
250
200
150
100
50
0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Development in Global markets 17
III. DEVELOPMENTS IN OIL AND ENERGY

CONSUMPTION IN THE ARAB COUNTRIES
1. Arab Countries
1-1 Total and Per Capita Energy Consumption
Initial data indicate that energy consumption in the Arab countries in

2002 increased 2% to 7.2 million barrels of oil equivalent per day (mboe/d),
compared with 7.0 mboe/d in 2001. In the period 1998-2002 there was a
slowdown in the growth rate of energy consumption from over 4.7% in the
last years of the preceding century to 2.2% in 2001.
The Arab countries’ consumption of energy in general and of
petroleum products in the period 1998-2002 was affected by several factors,
including the following:
• A decline in economic growth, as GDP growth rates in real terms fell
in the Arab countries from about 5.7% in 2000 to about 4.2% in
2001 and then to about 3.5% in 2002.
• Population growth rates dropped from the high levels that had
prevailed in the preceding period.
• Energy saving and consumption rationalization policies started to be
implemented in several countries.
• Policies were implemented to boost the efficiency of energy use,
improve the techniques used, reduce wastage, and enact legislation
for the optimal use of available resources.
• Local prices of petroleum products and electricity were raised in
several Arab countries with relatively high levels of energy
consumption.
• Economic reform programs started to be implemented in some Arab
countries.
OAPEC members accounted for 89.8% of the total energy
consumption of Arab countries in 2002, as shown in Table (1-17). This
percentage is in line with the OAPEC members’ share of the total industrial
sector in the Arab countries and with their level of economic development.
There was a disparity in energy consumption growth rates between
OAPEC members and other Arab countries. In OAPEC members the
growth rate was 1.8%, while in the other Arab countries it was 4.6%. This
disparity is primarily due to the difference in their economic structures and
their efficiency of energy use.
18 Oil and Energy Consumption in the Arab Countries
There was no tangible increase in per capita consumption of energy in

the Arab countries in the period 1998-2002, as it rose from 8.5 boe in 1998
to 8.9 boe in 2002. This rate disguises a vast difference between the Arab
countries, ranging from 12.6 boe in OAPEC member countries in 2002 to
2.5 boe in other Arab countries.
Per capita energy consumption in the Arab countries is mainly
influenced by the local availability of petroleum resources and the level of
economic development. The lack of any substantial increase in the per
capita consumption rate may be explained by population growth rate
exceeding the energy consumption growth rate.
Figure (1-15) and Table (1-18) show the per capita energy
consumption rates of the Arab countries in 2002.
Figure 1-15
Per Capita Energy Consumption in the Arab Countries, 2002
(boe/year)
12
10
0
OAPEC member Other Arab countries Total Arab countries
countries
1-2 Energy Consumption by Source

Energy policies in the Arab countries aim to enhance the benefit
derived form hydrocarbon energy sources and boost the efficiency of
available energy use. The Arab countries seek to increase the share of
natural gas in meeting local energy needs since natural gas enjoys the
relative advantages of being efficient in the industrial sector, particularly in
power generation, and environmentally friendly. Moreover, boosting the
share of natural gas in local energy consumption will allow the Arab
countries to increase their exports of crude oil and petroleum products.
This will bring local benefits, enhance the Arab countries’ position
vis-à-vis oil exports, and allow them to expand their role in stabilizing the
world oil market.
The Arab countries rely almost entirely on oil and natural gas to meet
their energy requirements as these two sources account for over 96.7% of
their total energy consumption.
There was a significant change in the pattern of energy consumption
in the Arab countries in the period 1998-2002, as the share of natural gas
rose from 39% in 1998 to 42% in 2002 owing to its expanded use in power
generation.
The increase was at the expense of oil, whose share declined from
56.3% to 54.8% in the same period. The relative importance of
hydroelectricity and coal also declined, as their combined share dropped
from 3.8% to 3.3% of total consumption in the same period, as shown in
Figure (1-16) and Table (1-17).
The Arab countries’ share of world energy consumption amounted to
3.9% in 2001, while that of the OECD countries accounted for 59.0%, the
countries in transition for 11.2%, and the remaining developing countries
for 25.9%, as shown in Figure (1-17).
Figure 1-16
Energy Consumption in the Arab Countries by Source, 2002
(Thousand boe/d)
4000
3500
3000
2500
2000
1500
1000
500
0
Petroleum Natural Gas Hydroelectricity Coal
products
Figure 1-17
Energy Consumption in the Arab countries and the World, 2001
(%)
60
50
40
30
20
10
0
Arab countriesOECD countries Countries in Other
transition Developing
countries
Figure (1-18) shows the relative distribution of energy consumption

by source in the Arab countries in 2002.
Figure 1-18
The Structure of Energy Consumption in the Arab Countries,
2002
Petroleum
products
54.8%
Natural Gas
42.0%
Hydroelectricity Coal
2.0% 1.2%
1-2-1 Petroleum Products

Despite the decline in the importance of oil, it still takes pride of
place among energy sources in the Arab countries’ consumption. Their
demand for petroleum products increased by 1.6% in 2002 to 3.9 mboe/d
(of which 286,000 boe/d was crude oil used in power stations), compared to
3.85 mboe/d in 2001, as shown in Table (1-17). OAPEC members
represented for 85.6% of the total Arab use of petroleum products in 2002,
while other Arab countries accounted for 14.4%. The Arab countries
represent only a small percentage of world petroleum products’
consumption, or 5.3% in 2001, while the OECD countries accounted for
about 64.4%, the countries in transition for about 5.4%, and other
developing countries for about 24.9%, as shown in Figure (1-19).
Figure 1-19
Oil Consumption in the Arab Countries and the World, 2001
(%)
70
60
50
40
30
20
10
0
Arab OECD Countries in Other
countries countries transition Developing
countries
1-2-2 Natural Gas

The Arab countries are striving to increase the value added of natural
gas, to raise its contribution to GDP, and to improve their balance of
payments. They seek to expand its use and as a substitute for fuel oil in
various industries especially in power generation. The increased supply of
natural gas and the development of its reserves and local uses form part of
the Arab countries’ overall energy policies and programs. Natural gas is the
second most important energy source in the Arab countries and its
contribution to meeting total energy needs expanded significantly in the
period 1998-2002, rising from 39% in 1998 to 42% in 2002.
Natural gas demand increased 5.5% in the period 1998-2002 from

about 2.4 mboe/d in 1998 to about 3 mboe/d in 2002, as shown in Table
(1-17). Gas is utilised in many spheres, of which the most important are
power generation, water desalination, as a feedstock in petrochemical and
LPG projects, and as an energy source in the industrial and household
sectors. OAPEC members use most of the natural gas available for
demand in the Arab states. They accounted for about 97.4% of total natural
gas demand in the Arab states in 2002. Among the other Arab states natural
gas is consumed mainly in Oman, with smaller quantities used in Jordan
and Morocco.
The Arab states as a whole accounted for 7.44% of world natural gas
consumption in 2001, while the OECD countries represented 54.04%, the
countries in transition for 23.95%, and the remaining developing countries
for 14.56%, as shown in Figure (1-20).
Figure 1-20
Natural Gas Consumption in the Arab Countries and the World, 2001
(%)
60
50
40
30
20
10
0
Arab OECD Countries in Other
countries countries transition Developing
countries
1-2-3 Hydroelectricity
There was a decline in hydroelectricity’s share of total energy
consumption in the Arab countries owing to the limited supply from
waterfalls. Hydroelectricity accounted for a mere 2.05% of total Arab
energy requirements in 2002, compared with 2.58% in 1998, as shown in
Table (1-17). Hydroelectricity use is limited to a few Arab countries led by
Egypt, followed by Iraq, Morocco, Syria, Algeria, Sudan, and Lebanon.
1-2-4 Coal
Coal is only consumed in a few Arab countries since its reserves are
limited and it only meets a tiny percentage of total energy requirements in
the Arab countries. In the period 1998-2002 it accounted for just 1.23% of
total Arab energy consumption. Morocco is the major user among the Arab
states, with an estimated consumption of about 55,000 boe/d in 2002. Egypt
comes in second place with a consumption of about 16,000 boe/d, followed
by Algeria with 14,000 boe/d. Tunisia also consumes small quantities of
coal.
2. OAPEC Member Countries
2-1 Total and Per Capita Energy Demand

Initial estimates indicate that energy demand in OAPEC member
countries increased about 115,000 boe/d, or 1.8%, in 2002 to 6.4 mboe/d,
compared with 6.3 mboe/d in 2001. Most of the increase occurred in two
member countries: Egypt, where it rose by about 29,000 boe/d, and Saudi
Arabia, where it rose about 24,000 boe/d. There were also increases in the
demand of the UAE (about 15,000 boe/d) and Syria (about 9,000 boe/d). In
other member countries, demand increases ranged between 3,000 boe/d
(Kuwait) and 8,000 boe/d (Algeria). Figure (1-21) and Table (1-19)
compare the energy demand of OAPEC member countries in 2002 with
2001.
Figure 1-21
Energy Demand in OAPEC Member Countries, 2001 and 2002
(Thousand boe/d)
2000
1800 2001 2002
1600
1400
1200
1000
800
600
400
200
0
Egypt
Bahrain
Iraq
Qatar
UAE
Algeria
Libya
Arabia
Syria
Tunisia
Kuwait
Saudi
Saudi Arabia was the biggest consumer of energy among the Arab
countries, accounting for about 28.6% of total OAPEC use. It was followed
by Egypt with 15.6%, the UAE with 11.4%, Algeria with 9.8%, Iraq with
8.4%, Qatar with 6.3%, and Libya with 5%. Per capita use in OAPEC
member countries rose slightly to 12.6 boe from 12 boe in 1998. The lack
of any tangible increase in per capita energy use may be attributed to a
population growth rate that exceeded the energy use growth rate. Qatar has
the highest rate of per capita energy use among OAPEC members with 256
boe in 2002, followed by Bahrain with 98 boe.
The high rates of per capita energy use in Qatar and Bahrain are due
to their huge industrialization programs, the dependence of their local
economies on energy-intensive industries, the high contribution of
manufacturing industries to their local economies, and the high standard of
living and urban expansion. In third place comes the UAE with 79 boe,
followed by Kuwait with 51 boe, Saudi Arabia with 29 boe, and Libya with
20 boe. In the remaining OAPEC countries per capita consumption ranges
between 5 boe (Tunisia) and 8 boe (Iraq), as shown in Figure (1-22) and
Table (1-18).
Figure 1-22
Per Capita Energy Consumption in OAPEC Member Countries, 2002
(boe)
300
250
200
150
100
50
0
Bahrain
Egypt
Iraq
Qatar
UAE
Algeria
Libya
Arabia
Syria
Tunisia
Kuwait
Saudi
2-2 Energy Consumption by Source

Petroleum products continued to take the lion’s share of total energy
consumption in OAPEC member countries in 2002, despite a decline in
their share from 53.6% in 1998 to 52.3%. Natural gas came second with
45.5%, which was significantly higher than its 42.4% share in 1998.
Hydroelectricity and coal account for an ever-decreasing share of total

energy consumption in OAPEC member countries. Their combined share
fell from about 2.9% in 1998 to about 2.2% in 2002, as shown in Figure
(1-23) and Table (1-20).
Figure 1-23
Energy Consumption in OAPEC Member Countries by Source, 2002
(Thousand boe/d)
3500
3000
2500
2000
1500
1000
500
0
Petroleum Natural Gas Hydroelectricity Coal
products
2-2-1 Petroleum Products

OAPEC members’ demand for of petroleum production increased by
45,000 boe/d, or 1.4%, in 2002 to 3.35 mboe/d (of which 286,000 boe/d of
crude oil was used in power stations), compared with about 3.31 million
boe/d in 2001. OAPEC countries achieved an annual growth rate of 2.4% in
their petroleum products’ use in the period 1998-2002. Petroleum products
play an essential role in meeting energy requirements in several OAPEC
member countries, in particular Iraq and Syria, where they account for
three-quarters of energy consumption. They meet two-thirds of energy
requirements in Kuwait, Saudi Arabia, and Tunisia, and over half in Egypt
and Libya.
Saudi Arabia is the biggest consumer of petroleum products among
OAPEC member countries, accounting for 35.6% of the OAPEC total. The
other major shares are divided as follows:
• Egypt (15.2%)
• Iraq (11.8%)
• UAE (9%)
• Algeria (6.7%).
In terms of product breakdown there was no significant change in the

OAPEC members’ consumption of petroleum products in the period 1998-
2002. Gasoil/diesel continues to top the list with 30.8% of the total,
followed in second and third places by fuel oil with 19.6% and gasoline
with 19.5%.
Figure (1-24) shows the mix of OAPEC members’ consumption of
petroleum products.
Figure 1-24
Petroleum Products’ Consumption Mix in OAPEC Member Countries,
2002
(%)
Gas Oil/Diesel Fuel Oil

30.8% 19.6%
Others
5.6%
Crude Oil
8.5%
Jet Fuel
LPG
4.6% Kerosene
8.7%
2.7% Gasoline
19.5%
2-2-2 Natural Gas

OAPEC member countries pursued a policy of increasing the
utilisation of natural gas in electric power stations and substituting it for
petroleum products, partly because of its lower impact on the environment.
Accordingly, natural gas consumption rose in OAPEC member
countries in the period 1998-2002 by 5.4%, from 2.4 mboe/d in 1998 to 2.9
mboe/d in 2002, as shown in Figure (1-25) and Table 1-22).
Some OAPEC countries rely heavily on natural gas to meet energy
requirements. The share of natural gas in total demand is as high as 90% in
Qatar, 87% in Bahrain, 61% in Algeria, and 55% in the UAE.
Figure 1-25
Natural Gas Consumption in OAPEC Member Countries, 1998 and 2002
(Thousand boe/d)
800
1998 2002
600
400
200
0
Bahrain
Egypt
Iraq
Qatar
UAE
Algeria
Libya
Arabia
Syria
Tunisia
Kuwait
Saudi
Moreover, natural gas accounts for about half of total energy use in
Libya and about a third in Egypt, Kuwait, and Saudi Arabia, as shown in
Figure (1-26).
Saudi Arabia represented 22% of total OAPEC natural gas
consumption in 2002, followed by Egypt and the UAE with 14.7% each in
second place. Next came Algeria and Qatar with about 13% each, and then
Bahrain with 5.6%.
Figure 1-26
Member Countries’ Shares of Total OAPEC Natural Gas Consumption, 2002
(%)
100
90
80
70
60
50
40
30
20
10
0
Egypt
Bahrain
Iraq
Qatar
UAE
Algeria
Libya
Arabia
Syria
Tunisia
Kuwait
Saudi
2-2-3 Hydroelectricity and Coal

Hydroelectricity and coal make only a tiny contribution to the energy
consumption mix of OAPEC members. Their combined share declined
from 2.9% of the total in 1998 to 2.3% in 2002. OAPEC members’ total
consumption of these sources fell from 164,000 boe/d in 1998 to 144,000
boe/d in 2002.
The decline is attributable to the drop in hydroelectricity generation in
Iraq. Most of the hydroelectricity and coal is used in Egypt (56%) owing to
its water resources that enable it to generate hydroelectricity. Next come
Algeria and Iraq with about 15% each and Syria with 13%, as shown in
Tables (1-23) and (1-24).
3. Final Energy Consumption in Arab Countries
3-1 Final Energy Consumption by Source

Petroleum products play an essential role in the Arab countries’ final
energy consumption, accounting for 60.1% in 2000. In OAPEC member
countries their share represented 58.5%, while in other Arab countries it
rose to 73.2%. Natural gas accounted for 25.6% of final demand in the
Arab states, 27.3% in OAPEC countries, and 11.3% in other Arab
countries.
Electricity took the third largest share of final energy consumption in
the Arab countries in 2000, with 13.8% of the total. Coal only accounted
for 0.5%. The disparity in shares is primarily due to the availability of these
sources and the economic structure of the Arab states.
3-1-1 Final Consumption of Petroleum Products

The transport sector represented the lion’s share of petroleum
products’ consumption in the Arab states in 2000 with 40.6%. In second
place came the industrial sector, where petroleum products are used in
petrochemical industries and in the manufacture of fertilizers and cement,
with 24.7%. The other sectors (household, commercial, and agricultural)
combined accounted for 34.7% of the total.
3-1-2 Final Consumption of Natural Gas

About two thirds of the final consumption of natural gas occurred in
the industrial sector, where it is used mainly in Bahrain and Qatar. The
aluminum industry in Bahrain relies entirely on natural gas. The remaining
third was used in the household, commercial, and agricultural sectors of the
Arab states in 2000.
3-1-3 Final Consumption of Electricity
The industrial sector accounted for 19.9% of electricity consumption

in the Arab states in 2000, and the household, commercial, and agricultural
sectors combined accounted for 79.9%.
A tiny amount (just 0.2%) was consumed by the transport sector, as
Figure 1-27
Relative Distribution of Final Energy Consumption by Source and Sector in
the Arab Countries, 2000
120
0.2
100
19.9
80 40.6
66.8
60
40 79.9 34.7
20 33.2 24.7
0
Electricity Natural Gas Oil Coal
Other Sectors Industrial Sector Transport Sector
3-2 Final Energy Consumption by Sector

The industrial sector is the largest consumer of energy in the Arab
states, accounting for 35.2% share of total final consumption in 2000. The
transport sector came in second place with 24.4%, while the other sectors
(household, commercial, and agricultural) combined accounted for 40.4%.
3-2-1 Energy Consumption in the Industrial Sector

Natural gas accounted for the largest share of final consumption in the
industrial sector in the Arab states in 2000: 48.6% compared with 42.2%
for oil, 7.8% for electricity, and 1.4% for coal. The percentages vary widely
between one Arab state and another. The share of natural gas in OAPEC
member countries, for example, is 50.1%, while in other Arab countries it is
only 34%. Petroleum products in OAPEC member countries account for
about 41.9% of total consumption in this sector, while in other Arab
countries their share rises to about 45.1%.
3-2-2 Energy Consumption in the Transport Sector

The transport sector in the Arab states relies entirely on petroleum
products to meet its energy requirements. It also uses tiny quantities of
electricity in Algeria and Tunisia.
3-2-3 Energy Consumption in Other Sectors of the Economy

Petroleum products account for the majority of final energy
consumption in these sectors (household, commercial, and agricultural). In
2000 their share amounted to 51.7%, followed in second place by electricity
with 27.2%. Natural gas came in third place with 21.1% of the total, as
shown in Figure (1-28).
Figure 1-28
Relative Distribution of Final Energy Consumption by Sector and Source in
the Arab Countries, 2000
1.4 0.1
100
7.8
27.2
80
42.2
60
99.9 51.7
40
48.6
20
21.1
0
Industrial Sector Transport Sector Other Sectors
Natural Gas Oil Electricity Coal
4. Energy Consumption Forecasts for the Arab Countries, 2005-2015

A study undertaken by the General Secretariat of energy demand
forecasts in the Arab states shows that total energy consumption will grow
by 2.6% per annum in the period 2005-2015. It is expected to reach 7.1
mboe/d in 2005, 8 mboe/d in 2010, and 9.2 mboe/d in 2015 (excluding the
crude oil used in power stations), as shown in Table (1-26). The study was
based on several assumptions about economic conditions (such as GDP,
population, and domestic price growth rates) as well as international
economic circumstances. It’s results indicate that total energy consumption
in the Arab states is affected by GDP, energy prices, and previous year
consumption.
The study forecast a shift in the relative distribution of sources used to

meet energy needs in the Arab states, with the share of natural gas rising
from 48.9% in 2005 to 50.7% in 2010 and to 53.3% in 2015. This growth
will be at the expense of oil, whose share will decline from 47.4% in 2005
to 45.4% in 2010 and then to 42.8% in 2015. Regarding other energy
sources (hydroelectricity and coal), there is not expected to be any
significant growth in their share, which will remain between 3.7% and 4%
in the period 2005-2015. The OAPEC members’ share of total Arab energy
demand will remain at 89.9% in the same period.
OAPEC members energy consumption, on the other hand, will
increase by 2.6% per annum to 6.4 mboe/d in 2005, 7.2 mboe/d in 2010,
and 8.3 mboe/d in 2015. The share of oil in the energy mix will decline
from 44.1% in 2005 to 41.9% in 2010 and then to 39% in 2015.
4-1 Consumption Forecasts for Petroleum Products in the Arab

Countries
It is expected that the consumption of petroleum products (excluding
crude oil used in power stations) will rise by 1.55% per annum in the period
2005-2015, reaching 3.4 mboe/d in 2005, 3.6 mboe/d in 2010, and 3.9
mboe/d in 2015, as shown in Table (1-26). In OAPEC members,
consumption of petroleum products will rise by at annual rate of 1.34% in
the same period, bringing it to 2.8 mboe/d in 2005, 3 mboe/d in 2010, and
3.2 mboe/d in 2015. In other Arab countries consumption will rise by
2.57% per annum to 553,000 boe/d in 2005, 621,000 boe/d in 2010, and
713,000 boe/d in 2015.
4-2 Natural Gas Consumption Forecasts in the Arab Countries

It is forecast that natural gas consumption will rise in the Arab states
by 3.5% per annum in the period 2005-2015, bringing it to 3.5 mboe/d in
2005, 4.1 mboe/d in 2010, and 4.9 mboe/d in 2015, as shown in Table
(1-26). In OAPEC members it is expected that natural gas consumption will
rise to 3.4 mboe/d in 2005, 4 mboe/d in 2010, and 4.8 mboe/d in 2015. In
other Arab countries it will increase by 2.8% per annum to 77,000 boe/d in
2005, to 88,000 boe/d in 2010, and to 101,000 boe/d in 2015.
4-3 Consumption Forecasts for Other Sources in the Arab Countries

It is forecast that consumption of other sources (hydroelectricity and
coal) in the Arab countries will grow by an annual rate of 3.2% in the
period 2005-2015, reaching 266,000 boe/d in 2005, 308,000 boe/d in 2010,
and 365,000 boe/d in 2015, as shown in Table (1-26). Consumption of
these sources in OAPEC members is expected to rise by an annual rate of
3.55%, bringing it to 178,000 boe/d in 2005, 210,000 boe/d in 2010, and

252,000 boe/d in 2015. In other Arab states will rise by 2.5% per annum,
totaling 88,000 boe/d in 2005, 99,000 boe/d in 2010, and 113,000 boe/d in
2015.
5. Domestic Prices
In some Arab states energy pricing policy forms part of general
economic programs aimed at moving toward a market economy. In others
pricing policy tends to be flexible, aimed at balancing prices and increasing
them gradually so as to bring prices in the local market in line with those on
the international market.
In most Arab countries there were no changes in 2002 in the prices of
petroleum products, which remained at their previous level. Tables (1-27)
and (1-28) set out the domestic prices of petroleum products in OAPEC
member countries.
There was a significant increase in petroleum product prices in Syria
in mid-May 2002. Super gasoline rose in price from 20.3 Syrian liras (SL)
per liter to SL24.1/liter, regular gasoline rose from SL19.8/liter to
SL23.8/liter, and kerosene from SL6.7/liter to SL9.2/liter. The price of a
12-kg liquefied petroleum gas (LPG) cylinder went up from SL101 to
SL140.
Petroleum product prices in Jordan were raised in 2001, when the
price of regular gasoline went from 241 fils/liter to 275 fils, super gasoline
jumped from 321 fisl/liter to 370 fils, unleaded gasoline went up from 371
fils/liter to 425 fils, kerosene increased from 91 fils/liter to 110 fils, and
diesel went up from 106 fils/liter to 110 fils.
36 Tables
TABLES OF CHAPTER ONE - PART ONE

Table 1-1
OPEC Production After Quota Reductions in 2002
(Thousand b/d)
Quotas as of Reductions Quotas as of

1/09/2001 1/01/2002
Algeria 741 48 693
Kuwait 1861 120 1741
Libya 1242 80 1162
Qatar 601 39 562
Saudi Arabia 7541 488 7053
UAE 2025 131 1894
Arab OPEC countries

14011 906 13105
Excluding Iraq
Indonesia 1203 78 1125
Iran 3406 220 3186
Nigeria 1911 124 1787
Venezuela 2670 173 2497
Non-Arab OPEC countries 9190 595 8595
Total OPEC countries 23201 1501 21700
Source:
- OPEC Weekly Oil Market Report, various issues .
Tables 37
Table 1-2
Annual changes in World Oil and NGLs Supply, 1998 - 2002
(Million b/d)
1998 1999 2000 2001 2002*
Total Supply
OPEC 30.8 29.4 30.8 30.3 28.3

Rest of the World 44.7 44.8 45.9 46.5 47.9
World total 75.5 74.2 76.7 76.8 76.2
Annual Change
OPEC 0.9 (1.4) 1.4 (0.5) (2.0)
Rest of the World 0.2 0.1 1.1 0.6 1.4
World total 1.1 (1.3) 2.5 0.1 (0.6)
Percentage Change (%)
OPEC 3.0 (4.5) 4.8 (1.6) (6.6)
Rest of the World 0.4 0.2 2.5 1.3 3.0
World total 1.5 (1.7) 3.4 0.1 (0.8)
* Preliminary estimates.
Note: Parentheses denote negative figures.
Sources:
- OAPEC - Economics Department.
- Reports from OPEC, CGES.
38 Tables
Table 1-3
World Economic Growth, 1998-2002
(%)
1998 1999 2000 2001 2002*

OECD 2.4 3.4 3.8 0.8 1.7
Of which: Europe 2.7 2.7 3.4 1.6 1.1
Japan (2.5) 0.8 1.5 (0.3) (0.5)
Mexico 4.9 3.7 6.9 (0.3) 1.5
South Korea (6.7) 10.9 8.8 3.0 6.3
USA 4.4 4.1 4.1 0.3 2.2
Countries in transition (0.8) 3.6 6.3 5.0 3.9
Of which: Central Asia and
2.5 4.6 7.8 6.3 4.6
the Caucasus
Eastern and
2.0 2.0 3.8 3.0 2.7
Central Europe
Russia (4.9) 5.4 8.3 5.0 4.4
Developing countries 3.5 3.9 5.8 3.9 4.2
Asia 4.1 6.1 6.8 5.6 6.1
Of which: China 7.8 7.1 8.0 7.3 7.5
India 6.3 6.8 6.0 4.1 5.0
Indonesia (13.0) 0.8 4.8 3.3 3.5
Malaysia (7.4) 6.1 8.3 0.5 3.5
Pakistan 2.6 4.1 3.9 3.6 4.6
Philippines (0.6) 3.4 4.0 3.2 4.0
Taiwan 4.7 5.4 6.0 (1.9) 3.3
Thailand (10.2) 4.2 4.4 1.8 3.5
Africa 3.1 2.5 2.8 3.5 3.1
Latin America 2.2 0.2 4.2 0.6 (0.6)
Of which: Argentina 3.9 (3.4) (0.5) (4.4) (16.0)
Brazil (0.1) 0.8 4.5 1.5 1.5
Venezuela (0.1) (6.1) 3.2 2.8 (6.2)
World 2.6 3.6 4.7 2.2 2.8
* Preliminary estimates
Note: Parentheses denote negative figures
Source:
- IMF, World Economic Outlook, September 2002.
Tables 39
Table 1-4
Growth in the World Economy and Oil Demand by Region,
1998-2002
(%)
1998 1999 2000 2001 2002*
OECD countries
GDP 2.4 3.4 3.8 0.8 1.7
Oil demand 0.2 1.7 0.4 (0.2) (0.2)
Developing countries
GDP 3.5 3.9 5.8 3.9 4.2
Oil demand 1.4 3.1 3.9 0.8 1.3
Countries in transition
GDP (0.8) 3.6 6.3 5.0 3.9
Oil demand (1.7) (6.7) 2.4 6.9 0.0
World total
GDP 2.6 3.6 4.7 2.2 2.8
Oil demand 0.4 1.6 1.6 0.5 0.3
Sources:
- Petroleum Intelligence Weekly, (PIW), various issues.
- Reports from OPEC, CGES and International Monetary Fund (IMF).
40 Tables
Table 1-5
Total & Annual Change in World Oil Demand, 1998-2002
(Million b/d)
1998 1999 2000 2001 2002*
World total demand 73.5 74.7 75.9 76.3 76.5
Annual Change in
0.3 1.2 1.2 0.4 0.2
World Oil Demand
Change (%) 0.4 1.6 1.6 0.5 0.3
Sources:
Table 1-6
World Oil Demand by Region, 1998-2002
(Million b/d)
1998 1999 2000 2001 2002*

OECD countries 46.8 47.6 47.8 47.7 47.6
Developing countries 22.2 22.9 23.8 24.0 24.3
Countries in transition 4.5 4.2 4.3 4.6 4.6
World total 73.5 74.7 75.9 76.3 76.5
Sources:
- Reports from Center for Global Energy Studies, (CGES).
Tables 41
Table 1-7
Total & Annual Change in Oil Demand in OECD
Countries, 1998-2002
(Million b/d)
1998 1999 2000 2001 2002*
North America 23.1 23.9 24.1 23.9 23.9
Western Europe 15.3 15.1 15.1 15.3 15.2
Pacific 8.4 8.6 8.6 8.5 8.5

Total OECD 46.8 47.6 47.8 47.7 47.6
Annual Change in
0.1 0.8 0.2 (0.1) (0.1)
demand
Change (%) 0.2 1.7 0.4 (0.2) (0.2)
Sources:
42 Tables
Table 1-8
Total & Annual Change in Oil Demand in Developing
Countries, 1998-2002
(Million b/d)
1998 1999 2000 2001 2002*

Arab countries 3.6 3.7 3.8 3.8 3.9
Of which: Member countries 3.1 3.2 3.3 3.3 3.3
Other Arab countries 0.5 0.5 0.5 0.5 0.6
Other countries in the Middle
2.9 2.9 3.0 3.5 3.5
East and Africa
Total Middle East and Africa 6.5 6.6 6.8 7.3 7.4
Asian developing countries 10.9 11.5 12.1 12.0 12.2

Of which: China 4.2 4.5 4.8 4.7 4.9
India 1.9 2.0 2.0 2.1 2.1
Other countries 4.8 5.0 5.3 5.2 5.2
Latin America 4.8 4.8 4.9 4.7 4.7
Of which: Brazil 2.1 2.1 2.2 2.2 2.1
Other countries 2.7 2.7 2.7 2.5 2.6
Total developing countries 22.2 22.9 23.8 24.0 24.3
Annual Change in demand in
0.3 0.7 0.9 0.2 0.3
developing countries
Change (%) 1.4 3.1 3.9 0.8 1.3
Sources:
Tables 43
Table 1-9
Total & Annual Change in Oil Demand in Countries
in Transition, 1998-2002
(Million b/d)
1998 1999 2000 2001 2002*
Former Soviet Union 3.7 3.5 3.6 3.9 3.9

Countries of Eastern Europe** 0.8 0.7 0.7 0.7 0.7
Total countries in transition 4.5 4.2 4.3 4.6 4.6
Annual Change in demand
(0.1) (0.3) 0.1 0.3 0.0
of countries in transition
Change (%) (1.7) (6.7) 2.4 6.9 0.0
** Excluding countries that joined the OECD.
Sources:
44 Tables
Table 1-10
Spot Price of OPEC Basket of Crudes, 1998-2002
($/barrel)
1998 1999 2000 2001 2002
January 14.4 10.7 24.6 24.1 18.3

February 13.5 10.0 26.8 25.4 19.0
March 12.4 12.3 26.7 23.7 22.6
April 12.8 15.0 22.9 24.5 24.8
May 13.1 15.5 26.9 26.3 24.8
June 11.7 15.6 29.1 26.1 23.8
July 12.1 18.3 27.9 23.7 25.2
August 11.9 19.7 29.1 24.5 25.9
September 12.9 22.2 31.5 24.4 27.4
October 12.4 21.6 30.4 19.6 27.3
November 11.2 23.8 31.2 17.7 24.3
December 9.7 24.8 24.1 17.6 28.4
First quarter 13.4 11.0 26.0 24.4 20.0
Second quarter 12.5 15.4 26.3 25.6 24.5
Third quarter 12.3 20.1 29.5 24.2 26.2
Fourth quarter 11.1 23.4 28.6 18.3 26.7
Annual average 12.3 17.5 27.6 23.1 24.3
Sources:
- OPEC reports.
Tables 45
Table 1-11
Average Spot Prices of the OPEC Basket and Selected
Arab Crudes, 1998-2002
($/barrel)
Price
Crudes 1998 1999 2000 2001 2002 Change
2002
OPEC Basket 12.3 17.5 27.6 23.1 24.3 1.2
Saharan Blend 13.0 18.1 28.8 24.1 24.8 0.7
Arabian Light 12.2 17.4 26.8 20.8 24.3 3.5
Dubai 12.2 17.2 26.2 20.9 23.8 2.9
Kuwait Export 11.3 16.7 25.8 19.3 23.6 4.3

Arab Heavy 10.9 16.4 25.2 19.0 23.4 4.4
Sources:
- OPEC reports.
46 Tables
Table 1-12
Nominal and Real Prices of Crude Oil, 1970-2002
($/barrel)
Nominal Price Index* 1995=100 Real 1995 Prices

1970 2.1 23.2 9.1
1971 2.6 24.7 10.5
1972 2.8 26.1 10.7
1973 3.1 28.2 11.0
1974 10.4 31.7 32.8
1975 10.4 35.3 29.5
1976 11.6 38.3 30.3
1977 12.6 41.5 30.4
1978 12.9 44.9 28.7
1979 29.2 48.7 60.0
1980 36.0 53.6 67.2
1981 34.2 58.6 58.4
1982 31.7 62.9 50.4
1983 30.1 66.4 45.3
1984 28.1 69.6 40.4
1985 27.5 72.5 37.9
1986 13.0 75.0 17.3
1987 17.7 77.4 22.9
1988 14.2 80.3 17.7
1989 17.3 83.6 20.7
1990 22.3 87.2 25.6
1991 18.6 91.1 20.4
1992 18.4 93.7 19.6
1993 16.3 96.0 17.0
1994 15.5 97.9 15.8
1995 16.9 100.0 16.9
1996 20.3 101.7 20.0
1997 18.7 103.4 18.1
1998 12.3 104.7 11.7
1999 17.5 105.9 16.5
2000 27.6 107.3 25.7
2001 23.1 108.6 21.3
2002 24.3 110** 22.1**
* The index represents the GDP Deflator of industrial countries as published by the IMF.
** Preliminary estimates.
Sources:
- Reports from OPEC and IMF.
Tables 47
Table 1-13
OECD Commercial Oil Inventories at Quarter End, 2001 - 2002

(million bbl)
2001 2002 2001 2002 2001 2002 2001 2002*

North America 1127 1230 1200 1239 1238 1207 1209 1179
Europe 917 934 909 941 918 923 937 905
Pacific 444 420 454 431 470 446 435 428
Total OECD 2488 2584 2564 2610 2627 2576 2581 2512
Rest of the World 1020 1039 1084 1062 1108 1086 1024 1099
Other Inventories** 935 898 922 901 931 914 901 915
Total Commercial 4443 4521 4571 4573 4666 4576 4506 4526
Days Supply 67.4 68.7 68.0 67.9 68.5 67.2 66.4 66.1
Usable Commercial*** 783 838 890 887 973 877 817 817
Days Supply 11.9 12.8 13.3 13.4 14.4 13.0 12.2 11.9
** Oil At Sea and Independent storage.
*** Stock holding over the above minimum operating needs (55 days).
Sources:
- OAPEC - Economics Department
- Reports from OPEC.
48 Tables
Table 1-14
Value of OAPEC Oil Exports in Current and
Real Prices, 1970-2002
($ Billion)
Expressed in
Year At Current Prices
Real 1995 Prices
1970 8.6 37.1
1971 11.4 46.2
1972 14.2 54.4
1973 22.4 79.4
1974 74.6 235.3
1975 67.1 190.1
1976 82.5 215.4
1977 91.1 219.5
1978 88.7 197.6
1979 145.6 299.0
1980 213.7 398.7
1981 198.4 338.6
1982 142.6 226.7
1983 101.4 152.7
1984 95.7 137.5
1985 83.0 114.5
1986 51.5 68.7
1987 63.8 82.4
1988 59.7 74.3
1989 78.6 94.0
1990 97.4 111.7
1991 85.6 94.0
1992 92.6 98.8
1993 83.3 86.8
1994 83.0 84.8
1995 93.7 93.7
1996 108.7 106.9
1997 110.0 106.4
1998 76.8 73.4
1999 109.7 103.6
2000 175.4 163.5
2001 148.8 137.0
2002* 131.5 119.5
Note: Real revenues are obtained by deflating current prices by the GDP Deflator
of industrial countries as published by the IMF.
Source:
Tables 49
Table 1-15
Petroleum Revenues in OAPEC Member Countries,
1998-2002
($ Million)
1998 1999 2000 2001 2002*

Algeria 5970 7556 12920 11790 11200
Bahrain 800 1706 2589 2054 1806
Egypt 1728 2555 2588 1917 2015
Iraq 6790 12104 18150 12676 13251
Kuwait 8471 11027 18193 14976 14601
Libya 6140 7734 13230 10880 10054
Qatar 3110 4775 7834 6964 5461
Saudi Arabia 31980 44934 70960 62981 55931
Syria 1320 1916 2743 2163 2484
Tunisia 282 410 ** ** **

UAE 10260 15021 26148 22414 14672
Total 76851 109738 175355 148815 131475
** Preliminary estimates indicate that oil consumption exceeds oil production.
Sources:
- OPEC reports.
50 Tables
Table 1-16
Per Capita Petroleum Revenues in OAPEC Member Countries,
2001 and 2002
(Dollar)
2001 2002*
Algeria 380 347

Bahrain 2877 2467
Egypt 30 31
Iraq 537 554
Kuwait 6582 6524
Libya 2014 1696
Qatar 12007 9481
Saudi Arabia 3026 2398
Syria 129 145
Tunisia - -
UAE 6834 4354
Source:
Tables 51
Table 1-17
Energy Consumption in the Arab Countries, 1998-2002
(Thousand boe/d)
1998 1999 2000 2001 2002*
A. By Source
Petroleum products **
Member countries 3047 3148 3256 3307 3352
Other Arab countries 506 532 532 547 562
Total Arab countries 3553 3679 3788 3854 3914
Natural gas
Hydroelectricity
Coal
B. By Groups
** Petroleum products include crude oil used in power plants.
Sources:
52 Tables
Table 1-18
Per Capita Energy Consumption in the Arab Countries,
1998 and 2002
(Boe/year)
1998 2002*
Algeria 7.4 7.1

Bahrain 98.2 97.8
Egypt 5.0 5.6
Iraq 8.5 8.2
Kuwait 47.6 50.6
Libya 20.0 19.8
Qatar 161.9 255.7
Saudi Arabia 28.6 28.7
Syria 6.2 6.4
Tunisia 4.7 4.9
UAE 84.7 79.3
OAPEC member countries 12.1 12.6
Other Arab countries 2.4 2.5
Total Arab countries 8.5 8.9
Sources:
- Country papers presented to the Seventh Arab Energy Conference, Cairo, 11 -14 May 2002.
Tables 53
Table 1-19
Energy Consumption in OAPEC Member Countries,
1998-2002
(Thousand boe/d)
1998 1999 2000 2001 2002*
Algeria 598 605 614 622 630

Bahrain 172 177 181 188 196
Egypt 833 890 952 991 1020
Iraq 510 514 527 533 538
Kuwait ** 292 307 305 307 310
Libya 288 299 310 316 321
Qatar 241 326 393 398 404
Saudi Arabia ** 1617 1705 1798 1810 1834
Syria 264 275 288 294 303
Tunisia 119 123 127 131 134
UAE 644 660 686 717 732
Total 5580 5881 6181 6307 6421
** Including energy consumption in the oil industry .
Sources:
- Country papers presented to the Seventh Arab Energy Conference, Cairo, 11 - 14 May 2002.
54 Tables
Table 1-20
Energy Consumption in OAPEC Member Countries by Source,
1998-2002
(Thousand boe/d)
1998 1999 2000 2001 2002*
Petroleum products** 3047 3148 3256 3307 3352
Natural gas 2369 2587 2781 2855 2925
Hydroelectricity 133 115 112 112 112
Coal 31 31 32 32 32
Total energy 5580 5881 6181 6307 6421
** Including energy consumption of the power plants.
Sources:
Tables 55
Table 1-21
Petroleum Products' Consumption in OAPEC Member Countries,
1998-2002
(Thousand boe/d)
1998 1999 2000 2001 2002*
Algeria 212 214 215 220 223
Bahrain 21 20 22 23 25
Egypt 496 502 495 510 509
Iraq ** 359 373 388 392 397
Kuwait *** 192 196 190 191 194
Libya 148 154 160 163 166
Qatar 23 22 23 23 24
Saudi Arabia *** 1027 1085 1164 1175 1194
Syria 198 211 220 226 231
Tunisia 81 83 85 87 88
UAE**** 290 288 295 298 302
Total 3047 3148 3256 3307 3352
** Figures include energy consumption of the power plants.
*** Figures include energy consumption of the oil sector and power plants.
**** Figures include consumption of ships fuel.
Sources:
56 Tables
Table 1-22
Natural Gas Consumption in OAPEC Member Countries,
1998-2002
(Thousand boe/d)
1998 1999 2000 2001 2002*
Algeria 365 370 378 380 385

Bahrain 151 157 159 165 171
Egypt 256 307 376 400 430
Iraq 109 117 119 120 120
Kuwait 100 111 115 116 116
Libya 140 145 150 153 155
Qatar 218 304 370 375 380
Saudi Arabia 590 620 634 635 640
Syria 49 46 50 50 54
Tunisia 37 38 40 42 44
UAE 354 372 391 419 430
Total 2369 2587 2781 2855 2925
Sources:
Tables 57
Table 1-23
Hydroelectricity Consumption in OAPEC Member Countries,
1998-2002
(Thousand boe/d)
1998 1999 2000 2001 2002*
Algeria 8.0 8.0 8.0 8.0 8.0

Egypt 65.0 65.0 65.0 65.0 65.0
Iraq 41.9 23.5 20.8 21.0 21.0
Syria 18.0 18.0 18.0 18.0 18.0
Tunisia 0.2 0.2 0.2 0.2 0.2
Total 133.1 114.7 112.0 112.2 112.2
Sources:
Table 1-24
Coal Consumption in OAPEC Member Countries,
1998-2002
(Thousand boe/d)
1998 1999 2000 2001 2002*
Algeria 13.0 13.0 14.0 14.0 14.0

Egypt 16.0 16.0 16.0 16.0 16.0
Syria 0.1 0.1 0.1 0.1 0.1
Tunisia 1.6 1.8 1.8 1.8 1.8
Total 30.7 30.9 31.9 31.9 31.9
Sources:
58 Tables
Table 1-25
Relative Distribution of Final Energy Consumption According to
Sources and Sectors in OAPEC Member and Other Arab
Countries in 2000
(%)
Industrial Transport
Others * Total
Sector Sector
OAPEC member countries
Oil 14.98 23.61 19.92 58.51

Natural Gas 17.90 0.00 9.44 27.34
Electricity 2.62 0.02 11.27 13.91
Coal 0.25 0.00 0.00 0.25
Total Energy 35.74 23.63 40.63 100.00
Other Arab countries

Oil 13.84 30.61 28.75 73.20
Natural Gas 10.43 0.00 0.87 11.30
Electricity 3.82 0.07 9.00 12.89
Coal 2.62 0.00 0.00 2.62
Total Energy 30.70 30.68 38.62 100.00
Total Arab countries

Oil 14.85 24.37 20.88 60.10
Natural Gas 17.08 0.00 8.51 25.60
Electricity 2.75 0.03 11.02 13.79
Coal 0.51 0.00 0.00 0.51
Total Energy 35.19 24.40 40.42 100.00
* Household, Commercial and Agriculture Sector.

Source:
Tables 59
Table 1-26
Forcast of Energy Consumption in the Arab Countries
(Thousand boe/d)
2005 2010 2015
A - Total Energy Consumption
Member countries 6393 7184 8266
Other Arab countries 718 807 927
Total Arab Countries* 7110 7992 9193
B - Petroleum Products' Consumption
Other Arab Countries 553 621 713
Total Arab Countries* 3370 3628 3933
C - Natural Gas Consumption
Total Arab Countries 3474 4055 4896
D - Other Energy Sources' Consumption
Total Arab Countries 266 308 365
* Excluding crude oil used in power plants.

Source:
60 Tables
Table 1-27
Domestic Prices of Petroleum Products in OAPEC
Member Countries, 2002
(Local currency/liter)
Currency Gasoline Household Gas oil/ LPG
Premium Regular Kerosene Diesel
Algeria Dinar 19 17 - 11 6
Bahrain Fils 100 80 25 70 100*
Egypt Piaster 100 90 40 40 250**
Iraq Dinar 50 40 5 10 150 **
Kuwait Fils 65 *** 60 *** 55 55 750 **
Libya Dirham 140 105 60 110 45
Qatar Dirham 70 60 55 - 83
Saudi Arabia Halala 90 - 44 37 63
Syria Lira 24 24 9 9 140**
Tunisia Millime 655 615 180 357 158
UAE Fils 87 80 77 86 80
* Per kilogram.
** Per cylinder.
*** Unleaded gasoline
Sources:
Tables 61
Table 1-28
Domestic Prices of Petroleum Products in OAPEC
Member Countries, 2002
(Cents/liter)*
Gasoline Household Gasoil/

Premium Regular Kerosene Diesel
Algeria 24 21 ‫ـ‬ 13
Bahrain 27 21 7 19
Egypt 22 20 9 9
Iraq ** 25 20 3 5
Kuwait 22 20 18 18
Libya 11 8 5 9
Qatar 19 16 15 -
Saudi Arabia 24 - 12 10
Syria 49 49 18 18
Tunisia 47 45 13 26
UAE 24 22 21 23
* Exchange rate in 2002.

** Cent per 10 liters.
Sources:
Developments of Energy Resourses 49
After long delays compared with the Gulf of Mexico and West Africa,
exploratory drilling activity started in deep offshore areas (in water depths
of over 1500 feet) in Indonesia, Malaysia, Brunei, and New Zealand. China
is planning to announce new concessions covering a large unexplored area
to the east of the country. However, in all these regions there is a higher
probability of finding natural gas than oil.
In 2002 the major oil and gas discoveries were made in deep offshore
areas in West Africa, Brazil, the Gulf of Mexico, South-east Canada, and
Malaysia. Other offshore discoveries were made in the North Sea, for the
first time to the far north of the Faeroes, in the Caspian Sea, Australia, and
Trinidad.
Significant gas discoveries were made in Mongolia, the Philippines,
and in offshore areas east of India. Canada added 174.8 billion barrels of
unconventional oil to its reserves, which represents 7% of the country’s
huge reserves of natural bitumen and can be produced using current
technology. Mexico, on the other hand, following a reappraisal of its oil
reserves, announced a significant reduction in their size for the second time
in five years.
The trend of international petroleum companies to merge, which had
started in 1998, continued in 2002, but the companies affected tended to be
smaller than those in previous years owing to the fierce competition they
faced from the giant oil companies. One of the biggest mergers in 2002 was
between Pan Canadian and Alberta Energy, which formed En-Cana.
Moreover, Dutch-British Shell bought the British company Inter-Brazil.
The giant companies resulting from mergers are finding it difficult to meet
the targets set at the time of merger, mainly due to the rise in the
exploration and development costs of oil and natural gas, which spiraled
60% to $6.33 per barrel.
Despite the relative drop in oil prices and production at the end of
2001 and the beginning of 2002, the oil companies increased their
investments in developing new reserves. The 15 biggest oil companies in
the world spent about $35.4 billion in the first nine months of 2002, which
was approximately what they spent in the whole of 2001.
The oil and gas industry in the Arab region witnessed a growth in
activity on all fronts in 2002. The number of crews working in seismic
surveying increased, despite a decline in this activity worldwide from its
2001 level. Exploratory drilling also increased, resulting in 75 new oil and
gas discoveries covering most of the Arab oil producing countries. Oil and
gas were also discovered on the coast of Mauritania, which raises hopes of
50 Oil and Gas
more discoveries being made in extensive areas off the Atlantic coast of
Arab North Africa. Most Arab oil producing countries implemented
development projects aimed at maintaining or increasing their oil
production capacity.
In terms of developing natural gas discoveries, Libya signed contracts
for major works on the West Libya Gas Project, which is expected to come
on stream in 2004. With an expected output of 10 billion cubic meters of
dry gas per annum, it is the biggest and most significant petroleum project
to be implemented in Libya. Qatar is executing projects to expand the
output capacity of its LNG production lines and is planning to become the
world’s biggest producer of LNG. At the same time, the initial engineering
plans were implemented for the first project to convert natural gas to liquids
and bids for the engineering, construction, and installation works are
currently being evaluated.
The project is scheduled to start commercial production at the end of
2005 with an initial production capacity of 34,000 b/d. It is the first in a
series of similar projects currently under study that, when completed, will
make Qatar the center of the industry for converting gas into liquids.
A significant event in Arab cooperation in 2002 was the
announcement by the energy ministers of Egypt, Jordan, Lebanon, and
Syria that they had set up the Arab Gas Authority, which would take charge
of operations related to implementing the project for transporting Egyptian
natural gas to the other three Arab states and subsequently to Cyprus and
Turkey.
They also announced that technical studies would be conducted on
increasing the gas export capacity. It was also decided that the four
countries would have equal shares in the new Arab Gas Transportation and
Marketing Company and that each country would be responsible for
financing and constructing the gas pipelines passing through its territory.
Egypt started building the section in its territory that links El-Arish on the
Mediterranean with Aqaba on the Red Sea in Jordan.
A new company belonging to Kuwait Petroleum Corporation was
formed in 2002 under the name Kuwait Gulf Oil Company to replace the
Arabian Oil Company (Japan), whose 40-year concession ends at the
beginning of 2003.
The new company will undertake all offshore oil activities in the area
shared by Kuwait and Saudi Arabia, including exploration, drilling, field
development, oil and gas transportation and treatment, and oil refinery
management.
1-1 Seismic Surveys

Initial data for 2002 show an increase in seismic surveying activity in
OAPEC member countries compared with 2001 as the estimated activity
rose from 339 crew/month to 361 crew/month. The increase was mainly
due to the execution of 2-D and 3D seismic surveys in Saudi Arabia, the
UAE, Algeria, and Libya. The largest share of the activity was accounted
for by Saudi Arabia, as Saudi Aramco’s efforts rose from 90 crew/month in
2001 to 120 crew/month in 2002. The company intensified its 3D seismic
surveying activity in particular so as to ascertain the dimensions of
producing fields accurately, to monitor the performance of reserves put into
production, and to position developmental wells in undepleted areas.
Seismic surveying activity also increased in the UAE, from 31 to 37
crew/month. The operating companies in the UAE focused their efforts on
the producing fields by executing 3D seismic surveys of the Bab,
Qawshahwira, Zakum, and Margham fields. In Algeria, surveying activity
rose from 70 to 80 crew/month. It included 2D and 3D seismic surveys in
the Ghadames, Illizi, Timimoun, and Ahnet basins and in the Hassi
Messaoud and Leil plateaus. Libya also witnessed an increase from 39 to 58
crew/month in its seismic surveying activity, which covered 2D and 3D
surveys in the Ghadames, Murzuq, and Sirte basins. Syria’s seismic
surveying activity, which rose from 26 to 30 crew/month, was focused in
the Palmyra region where the national oil company implemented 2D
seismic surveys so as to identify sites for drilling new exploratory wells. A
Croatian company carried out 3D surveys to clarify the dimensions of
prospective structures in which significant gas discoveries had been made.
Bahrain’s limited activity (3 crew/month) involved 3D surveys aimed at
identifying sites for exploratory drilling in the offshore area to the east and
south east of the country.
In other OAPEC member countries seismic surveying activity
declined in 2002. Egypt’s activity, which fell from 28 crew/month in 2001
to 26, focused on 2D and 3D surveys in the basins of the Gulf of Suez,
Abul-Gharadiq, El-Gundi, the Nile Delta, and Northern Egypt, and in
offshore areas in the Mediterranean. Activity in Tunisia, which declined
from 17 to 4 crew/month, was concentrated in the Hafara, Ghadames, and
Pelagean basins. Qatar’s activity, which dropped from 14 to 3 crew/month,
involved 2D seismic surveys to identify sites for onshore exploratory
drilling. No surveys were carried out in Iraq and Kuwait in 2002.
In other Arab countries, seismic surveying activity increased in Sudan
and Oman in 2002. Activity in Sudan, which rose from 6 to 7 crew/month,
was concentrated in the Muglad Basin. In Oman, where activity rose from
52 Oil and Gas
27 to 47 crew/month, 2D and 3D surveys were executed in the Arabian and

Batina basins and in the Masira Depression. Activity in Yemen, which
declined from 39 crew/month in 2001 to 28 in 2002, covered 2D and 3D
surveys in the Marib-Al Jawf-Shabwah and Arabian basins and in the
plateaus of north and south Hadramawt.
Seismic surveying activity in the Arab oil producing countries totaled
about 443 crew/month, as shown in Figure 2-1 and Table 2-1. The number
of crews operating worldwide dropped from 333 at the end of 2001 to 272
at the end of 2002.
Figure 2-1
Seismic Surveying Activity in OAPEC and Other Arab Countries,
1998-2002
(Crew/month)
500
400
300
200
100
0
1998 1999 2000 2001 2002
OAPEC Members Other Arab Countries
1-2 Exploratory and Developmental Drilling

For the third year running there was an increase in the number of rigs
operating in OAPEC member countries in 2002, despite a significant
decline in the number operating worldwide.
The number of rigs operating in Arab states rose from 217 at the end
of 2001 to 229 at the end of 2002. OAPEC member countries accounted for
183 of the total.
The number of rigs operating worldwide declined from 2165 to 1987
in the same period, as shown in Figures (2-2) and (2-3) and Table (2-2).
The worldwide usage rate of offshore rigs at the end of 2002 was 81.9%.
Figure 2-2
Active Drilling Rigs in OAPEC Members and Other Arab Countries,
1998-2002
200
150
100
50
0
1998 1999 2000 2001 2002
Figure 2-3
Active Drilling Rigs Worldwide,
End 2002
1987
Rest of World
28.4% Rigs
Arab Countries
11.5%
North America
60.1%
There were increases in the number of rigs operating in Tunisia (by 5

rigs), in Syria and Egypt (by 3 each), in Algeria (by 2 rigs), and in Bahrain,
Qatar, and Saudi Arabia (by 1 each). The number of rigs operating in Iraq
and Kuwait remained unchanged, while there were decreases in the UAE
(by 2 rigs) and in Libya (by 1 rig).
Regarding other Arab countries, the number of rigs operating in Oman
rose by 8 and in Yemen by 1, while in Sudan the number declined by 1.
54 Oil and Gas
Despite the relatively small increase in the number of rigs operating in

OAPEC member countries at the end of 2002, there was a significant
increase in the number of developmental and exploratory wells drilled in
most OAPEC countries in 2002 owing to the increased efficiency of
drilling, which is in turn attributable to the cumulative experience of the oil
companies. The number of wells drilled rose from 1172 in 2001 to 1270 in
2002.
The biggest increase occurred in Saudi Arabia, where the number of
wells drilled rose from 265 to 326 wells. Most of these were developmental
wells in major oil-producing fields aimed at boosting the production
capacity of reservoirs producing light and very light oil. Some exploratory
wells were also drilled in the Eastern Province so as to expand the
Kingdom’s discovered reserves of non-associated natural gas.
Drilling activity in Egypt rose from 192 to 197 wells, which included
exploratory and developmental wells in prospective onshore, offshore, and
deep water areas in the Gulf of Suez, Northern Egypt, Abul-Gharadiq, and
Nile Delta basins.
In Algeria the number of wells drilled increased from 170 to 182.
Developmental drilling was used to develop several new fields in the Hassi
Berkine basin and exploratory drilling was carried out in most of the
prospective areas. In Libya the number of wells drilled rose from 97 to 116,
most of which were aimed at developing already discovered fields apart
from some exploratory wells in the Sirte basin. All of the 110 wells drilled
in the UAE in 2002, compared with 92 in 2001, were developmental wells
covering most of the major producing fields, apart from one exploratory
well in Ajman emirate. Most of the wells employed horizontal drilling by
drilling two or more horizontal shafts (multilateral drilling).
In Syria drilling activity increased in 2002 as 126 wells were drilled,
compared with 117 the previous year. They covered exploratory drilling in
the central region of Palmyra, and developmental drilling in the fields of
Deir ez-Zor and Al-Hasakeh. Most of the wells drilled in Qatar, which rose
in number from 87 to 89, were developmental, located in the majority of the
oil producing fields, in addition to some appraisal wells in the North gas
fields. Some exploratory wells were located onshore. Bahrain’s number of
wells drilled rose from 22 to 28 as exploratory activity took place for the
first time in two new offshore sectors to the east and south east of the
country. The rise in the number of wells drilled in Tunisia, from 14 to 21,
was attributable to a significant rise in exploratory drilling covering new
areas in the Jaride and Ghadamis onshore basins onshore and in the
Pelagean offshore basin.
On the other hand, the number of wells drilled in Kuwait declined

from 100 in 2001 to 75 in 2002. Most of the wells drilled were
developmental, located in most of the oil producing fields, in addition to
some exploratory wells in the northern parts of the country.
Non-OAPEC Arab oil producers witnessed a significant increase in
exploratory and developmental drilling in 2002. The number of wells
drilled in Oman rose from 345 to 360, most of which were developmental
wells aimed at offsetting the natural decline in the production capacity of
the oil producing fields, in addition to some exploratory wells in southern
parts of the Sultanate. In Yemen drilling activity rose from 84 to 120 wells.
Most of the developmental wells were located in the Messila, Shabwah, and
Marib-Al Jawf areas, while the exploratory drilling took place in the Sir-
Sayun, Empty Quarter, and Marib-Al Jawf-Shabwah basins and on al-
Mukalla High. In Sudan the number of wells drilled rose from 48 to 50.
Developmental drilling there was aimed at completing the development of
the fields that had recently been brought on stream, while exploratory
drilling focused on the Muglad basin.
The number of exploratory and developmental wells drilled in the
Arab oil producing countries in 2002 totaled about 1800, compared with
1649 in 2001, as shown in Figure (2-4) and Table (2-3). Moreover, owing
to the increased number of operating rigs and the number of wells drilled in
2002, the depth of wells drilled in OAPEC member countries rose from
2987 linear kilometers in 2001 to 3449 km in 2002. The total depth of wells
drilled in Arab oil producing countries rose from 3929 linear kilometers to
4593 km in the same period, as shown in Figure (2-5) and Table (2-4).
Figure 2-4
Exploratory and Developmental Wells Drilled in OAPEC Member Countries
and Other Arab Countries, 1998-2002
1400
1200
1000
800
600
400
200
0
1998 1999 2000 2001 2002

56 Oil and Gas
Figure 2-5
Exploratory and Developmental Drilling in OAPEC Member Countries and
Other Arab Countries, 1998-2002
(Linear kilometers)
3500
3000
2500
2000
1500
1000
500
0
1998 1999 2000 2001 2002
Together, these activities resulted in 50 new discoveries, 34 oil and 16

gas, in OAPEC member countries, compared with 38 in 2001, as shown in
Figures (2-6) and (2-7) and Table (2-5).
Figure 2-6
Oil Discoveries in OAPEC Member Countries and Other Arab Countries,
1998-2002
60
50
40
30
20
10
0
1998 1999 2000 2001 2002

Figure 2-7
Gas Discoveries in OAPEC Member Countries and Other Arab Countries,
1998-2002
25
20
15
10
0
1998 1999 2000 2001 2002
Egypt upheld its position at the head of those Arab countries that
made discoveries in 2002, with a total of 32 oil discoveries and 22 gas.
Algeria and Libya made three oil discoveries each, Tunisia made two oil
discoveries and one gas, Kuwait and Saudi Arabia made two oil discoveries
each, Syria made three gas discoveries, and Iraq made two gas discoveries.
Non-OAPEC Arab countries made 25 oil and gas discoveries, of
which Oman accounted for 8 oil discoveries and 3 gas, Yemen for 9 oil
discoveries, and Sudan for 5 oil discoveries.
It should be noted that the number of discoveries mentioned above is
only provisional and that other discoveries may be announced later,
particularly since some exploratory wells drilled in the course of the year
have yet to be tested, despite giving encouraging results.
2. Oil and Natural Gas Reserves
2-1 Oil Reserves

Proven oil reserves cover both crude oil and condensates. Estimates of
total world reserves rose at the end of 2002 by 5.37 billion barrels, or 0.5%,
from 1063.43 billion at the end of 2001 to about 1068.8 billion at the end of
2002. The rise was mainly due to increases in the estimated reserves of the
Commonwealth of Independent States (CIS) (by about 20.83 billion
barrels), Ecuador (by about 2.5 billion barrels), Norway (by about 818
million barrels), India (by about 572 million barrels), the USA (by about
58 Oil and Gas
400 million barrels), and some other countries (by no more than 250 million
barrels each). On the other hand, the estimated reserves of Mexico declined
by about 14.3 billion barrels, those of China by about 5.75 billion barrels,
and some other countries by less than 250 million barrels each, including
the UK.
The estimated oil reserves of OAPEC member countries and other
Arab states remained unchanged. It should be noted that estimates of world
oil reserves in this report do not include the increase of about 175 billion
barrels in Canada’s estimated reserves in 2002, because it is believed that
the increase includes recoverable oil from tar sands, which are not usually
included in figures for conventional sources of crude oil.
Major developments in the estimated reserves of crude oil and
condensates in 2002 are summarized by international grouping below and
Figure 2-8
World Oil Reserves by International Grouping, End 2002
1068.8
CIS
Billion barrels
Non-Arab 7.3%
OPEC
20.0%
North America
3.7%
Others OAPEC
8.9% Members
60.1%
OAPEC Members and Other Arab Countries

The estimated oil reserves of OAPEC members and other Arab states
remained almost unchanged at the end of 2002. The total for OAPEC
members was about 642.6 billion barrels and for other Arab states, namely
Oman, Sudan, and Yemen, about 10.66 billion barrels, bringing the total for
the Arab states to 653.26 billion barrels. The reason for the lack of change
in the estimates was that the additional reserves equaled the volumes
produced in the course of the year. OAPEC member countries accounted
for about 60.1% of world estimated reserves, which totaled 1068.8 billion
barrels, and the Arab states together accounted for 61.1% of the world total.
Figure (2-8) shows the shares of OAPEC members and other international
groupings of estimated world oil reserves at the end of 2002.
Figure (2-9) shows the evolution of OAPEC members’ proven

reserves in the period 1998-2002.
Figure 2-9
The Evolution of Oil Reserves in OAPEC and OPEC Member Countries,
1998-2002
(Billion barrels at year end)
900
800
700
600
500
400
300
200
100
0
1998 1999 2000 2001 2002
OAPEC Members OPEC Countries
OPEC Countries
Venezuela contributed to a slight increase in OPEC’s estimated oil
reserves at the end of 2002. The increase, of no more than 120 million
barrels, brought the organization’s total estimated reserves to about 77.81
billion barrels, which was 0.2% more than its total of 77.69 billion barrels
at the end of 2001.
The estimated reserves of other OPEC countries remained unchanged,
totaling about 848.83 billion barrels, compared with 848.71 billion at the
end of 2001. OPEC member states account for about 79.4% of the
world’s estimated proven oil reserves.
Figure (2-9) shows the evolution of OPEC and OAPEC members’ oil
60 Oil and Gas
North Sea
Norway’s estimated oil reserves rose by 8.7% from 9.45 billion
barrels in 2001 to 10.27 billion at the end of 2002. The UK’s estimated oil
reserves, on the other hand, continued the downward pattern of previous
years and dropped by 4.3%, from 4.93 billion. This group accounts for
1.4% of world oil reserves.
North America
Mexico’s estimated oil reserves declined by more than half in 2002,
falling 53.2% from 26.94 billion barrels in 2001 to 12.62 billion. It is
believed that the change is attributable to an updating of its proven reserve
estimates according to the latest data. US estimates of proven oil reserves,
on the other hand, increased 1.8%, from 22.05 billion barrels in 2001 to
22.45 billion at the end of 2002. Canada’s estimated proven reserves
remained unchanged from their 2001 level of about 4.86 billion barrels,
although some sources estimated Canada’s reserves at about 180 billion
barrels at the end of 2001and 2002. It is thought that these estimates include
unconventional oils that are expected to be extracted from tar sands in the
north of Alberta.
The countries of this group account for 3.7% of total world oil
reserves.
CIS and China

The estimated reserves of the Commonwealth of Independent States
rose significantly in 2002 following a stagnation of several years. They
totaled about 77.83 billion barrels at the end of 2002, compared with 57
billion at the end of 2001, an increase of about 20.8 billion barrels, or
36.5%. Russia accounted for about 11.4 billion barrels, Azerbaijan for
about 5.82 billion, and Kazakhstan for about 3.58 billion barrels of the CIS
total.
In contrast, China’s estimated oil reserves declined 24%, from 24
billion barrels in 2001 to about 18.25 billion at the end of 2002. This group
accounts for 9% of total world oil reserves.
Rest of the World

Countries not included in the previous categories form this group.
Most of them lie in Africa, East Asia, Australia, and South America. The
estimated oil reserves for this group totaled about 51 billion barrels at the
end of 2002, as against about 47.54 billion at the end of 2001.
There were both increases and decreases among the countries of this
group. The increases were recorded in several countries, most importantly
Ecuador with a rise of about 2.5 billion barrels, India with a rise of about
572 million barrels, and Denmark with a rise of about 234 million barrels.
The estimated oil reserves of several countries declined by the
amounts they produced during the year, including those of Brazil and
Argentina.
This group accounts for 4.8% of the world’s total oil reserves.
2-2 Natural Gas Reserves

Estimates of world natural gas reserves increased about 9.7% in 2002,
from about 157.5 trillion cubic meters at the end of 2001 to about 172.7
trillion at the end of 2002.
This relatively high increase compared with the previous five years
was mainly due to Qatar, whose reserves rose by about 10.9 trillion cubic
meters, Iran (about 3.6 trillion cubic meters), Norway (about 725 billion
cubic meters), and the USA (about 171 billion cubic meters). In contrast,
the estimated reserves of Mexico declined by about 586 billion cubic
meters and those of the CIS by about 125 billion cubic meters.
The evolution of natural gas reserves at the end of 2002 is reviewed by
international grouping below and shown in Figure (2-10) and Table (2-7).
Figure 2-10
World Natural Gas Reserves, End 2002
172.7
CIS
32.0%
Trillion cubic meters
OAPEC
Others Members
12.0% 29.3%
Non-Arab
North America
OPEC
4.1%
22.6%
62 Oil and Gas

OAPEC members estimated reserves of natural gas increased 28%
from 39.48 trillion cubic meters at the end of 2001 to about 50.52 trillion at
the end of 2002. Qatar accounted for the lion’s share of the increase, as its
reserves rose by 74.4%, from 14.61 trillion cubic meters to about 25.49
trillion. The increase may be attributed to the studies that were conducted
to assess the proven natural gas reserves of the North field and other fields.
Egypt’s estimated reserves rose 6.4%, from about 1.56 trillion cubic
meters at the end of 2001 to about 1.66 trillion at the end of 2002. There
was also a 1.5% increase in Algeria’s reserves, from about 4.46 billion
cubic meters at the end of 2001 to about 4.52 billion at the end of 2002.
The estimated natural gas reserves of the remaining OAPEC members
and other Arab states stayed at their 2001 level. The estimated proven
reserves of natural gas in the Arab countries as a whole totaled about 51.86
trillion cubic meters at the end of 2002, which was 27% higher than at the
end of 2001, when they totaled 40.82 trillion. Arab natural gas reserves
constitute 30% of the world total of about 172.7 trillion cubic meters, while
OAPEC member countries account for 29.3%, as shown in Figure (2-10).
Figure (2-11) shows the evolution of OAPEC and OPEC natural gas
Figure 2-11
The Evolution of Natural Gas Reserves in OAPEC and
OPEC Member Countries, 1998-2002
(Billion cubic meters at year end)
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
1998 1999 2000 2001 2002

OPEC Countries
The OPEC countries’ estimated reserves of natural gas in 2002 rose
20%, or by 14.56 trillion cubic meters, from 72.84 trillion cubic meters at
the end of 2001 to about 87.4 trillion at the end of 2002. Qatar accounted
for about 10.9 trillion cubic meters of the increase, Iran for about 3.6
trillion, and Indonesia and Venezuela for limited amounts. The estimated
natural gas reserves of the other members remained almost unchanged.
OPEC countries’ reserves represent about 50.6% of world natural gas
reserves. Figure (2-11) shows the evolution of OPEC members’ natural gas
North Sea
Norway’s estimated proven reserves of natural gas rose 75.5%, from
about 1.25 trillion cubic meters at the end of 2001 to about 2.19 trillion at
the end of 2002. In contrast, the UK’s reserves declined 5.2%, from 735
billion cubic meters to 697 billion in the same period.
Norway and the UK together account for 1.7% of the world’s total
estimated reserves of natural gas.
North America
The estimated natural gas reserves of this group was affected by the
70.2% decline in Mexico’s reserves, which dropped from 835 billion cubic
meters at the end of 2001 to 249 billion at the end of 2002. The decline
coincided with Mexico’s decline in estimated oil reserves, which is
probably due to an updating of declared estimates.
The estimated reserves of the USA, on the other hand, rose 3.4%,
from about 5 trillion cubic meters at the end of 2001 to about 5.2 trillion at
the end of 2002, while those of Canada rose 0.6%, from 1691 billion cubic
meters to about 1702 billion in the same period.
The countries of this group account for 4.1% of total world reserves of
natural gas.
CIS and China

The estimated natural gas reserves of the countries of this group
recorded both rises and falls. There was a 0.2% decline in the estimated
reserves of the Commonwealth of Independent States, from about 55.4
trillion cubic meters at the end of 2001 to about 55.3 trillion at the end of
2002. This decrease, although limited, was the net result of a fall of about
849 billion cubic meters in the estimated reserves of Turkmenistan and a
64 Oil and Gas
rise of about 725 billion cubic meters in the reserves of Azerbaijan. China’s
estimated reserves of natural gas also rose, from about 1.37 trillion cubic
meters at the end of 2001 to about 1.5 trillion at the end of 2002, an
increase of 10.4%.
This group of countries accounts for 32.9% of total world reserves of
natural gas. The CIS alone accounts for the lion’s share of world reserves,
with a 32% share of the total.
Rest of the World
The estimated natural gas reserves of the remaining countries of the

world increased slightly at the end of 2002, rising 0.3% from about 14.9
billion cubic meters at the end of 2001 to about 14.95 billion at the end of
2002. The increases occurred mainly in India, whose reserves rose about
115 billion cubic meters, in addition to smaller rises in Pakistan, New
Zealand, Denmark, Poland, and Brazil. Decreases were recorded in the
reserves of Germany, the Netherlands, Argentina, and Ecuador.
This group account for 8.6% of total world reserves of natural gas.
3. Hydrocarbon Liquids and Natural Gas Production
3-1 Hydrocarbon Liquids Production

Oil production covers both crude oil and condensates production,
while hydrocarbon liquids production covers natural gas liquids (NGL) as
well.
3-1-1 Oil Production

The daily rate of oil production fluctuated up and down throughout
2002 in response to concerns about the situation in the Middle East and the
instability of oil supplies from Venezuela toward the end of the year.
Production was also affected by OPEC countries’ policies, which
aimed to maintain market stability while meeting oil requirements and
keeping prices between $22 and $28 per barrel. World oil production
declined 1% over the year, from about 67.3 million b/d in 2001 to about
66.62 million b/d in 2002. OPEC countries accounted for about 25.7
million b/d of world production, the CIS for about 8.9 million b/d, and the
USA for about 5.8million b/d.
The evolution of oil production is reviewed by international grouping

below and in Figure (2-12) and Table (2-8).
Figure 2-12
World Crude Oil Production by International Grouping, 2002
CIS
Others 13.4%
29.0%
OAPEC
Members
27.4%
Non-Arab OPEC
13.4% North America
16.7% 66.6
Million b/d

The oil production of OAPEC member countries declined 4.5% from
about 19.13 million b/d in 2001 to 18.26 million in 2002. UAE production
dropped by 11%, from about 2.23 million b/d to about 1.98 million,
Bahrain’s fell 20.9%, from about 234,000 b/d to about 185,000 b/d, Saudi
Arabia’s 3.4%, from about 7.92 million b/d to about 7.65 million b/d,
Syria’s 5.2%, from 522,000 b/d to 495,000 b/d, Qatar’s 6%, from 681,000
b/d to 640,000 b/d, Libya’s 1.8%, from about 1.32 million b/d to 1.3
million b/d, and Egypt’s 1.3%, from about 760,000 b/d to about 750,000
b/d. The overall decline in the production rates of these countries is
attributable to the decline in their crude oil production, despite a rise in the
condensates production of some countries. Egypt’s production of
condensates, for example, rose 9%, from about 80,200 b/d to about 87,400
b/d.
In contrast, Algeria’s oil production increased by 0.9%, from 842,000
b/d in 2001 to about 850,000 b/d in 2002, Kuwait’s oil production rose
1.8%, from about 1.95 million b/d to about 1.98 million b/d. There was also
a small increase of 400 b/d in Tunisia’s production.
The OAPEC members’ share of world oil production amounted to
27.4%, as shown in Figure (2-12). Figure (2-13) shows the oil production
rates of OAPEC and OPEC member countries in the period 1998-2002.
66 Oil and Gas
The production of other Arab states declined in 2002. That of Oman

dropped 7.2%, from 946,000 b/d to about 895,000 b/d and Yemen’s
production decreased by less than 1,000 b/d, while Sudan’s production
remained constant at its 2001 level of about 230,000 b/d. The Arab
countries as a whole accounted for 29.8% of total world oil production.
OPEC Countries
The OPEC countries’ oil production declined 6.3% in 2002, from
about 27.4 million b/d in 2001 to about 25.7 million b/d. The slump was
due to the instability of supplies from Venezuela, particularly toward the
end of the year, and the cessation of oil supplies from Iraq for a month in
the first half of the year.
The production rate of non-Arab OPEC members declined 9.5%
owing to a 7.8% drop in Indonesia’s output from about 1.2 million b/d to
about 1.1 million, a 6.4% drop in Iran’s output from about 3.7 million b/d
to about 3.3 million, a 14.4% drop in Venezuela’s output from 2.8 million
b/d to about 2.4 million, and a 9.3% drop in Nigeria’s output from about 2.1
million b/d to about 1.9 million.
Figure (2-13) shows the evolution of OAPEC and OPEC countries’ oil
production in the period 1998-2002.
The OPEC countries accounted for about 38.6% of total world
production in 2002.
Figure 2-13
Oil Production in OAPEC and OPEC Member Countries, 1998-2002
(Million b/d)
30
25
20
15
10
0
1998 1999 2000 2001 2002

North Sea
UK oil production continued to decline in 2002, when it fell 3.5%
from its 2001 level of 2.33 million b/d to about 2.25 million b/d. Norway’s
output also declined by 3.5%, falling from about 3.24 million b/d to 3.15
million. This group accounted for 8.1% of total world oil production.
North America
The oil production of both Mexico and Canada rose in 2002, while
that of the USA declined slightly by no more than 31,000 b/d. Mexico’s
output increased by 1.7%, from about 3.13 million b/d in 2001 to about
3.18 million, while Canada’s rose 6.9%, from 2.05 million b/d in 2001 to
about 2.2 million. It is believed that Canada’s increase was due to increased
volumes of oil being extracted from tar sands in the north of Alberta state.
US production totaled about 5.77 million b/d in 2002. Together, the
countries of this group accounted for 16.7% of total world oil production in
2002.
CIS and China

The CIS production of crude oil continued to rise in 2002. It increased
8.8%, from 8.2 million b/d in 2001 to about 8.9 million b/d in 2002. Most
of the increase came from the Russian Federation. China’s oil output also
rose, from about 3.3 million b/d in 2001 to about 3.4 million b/d in 2002, an
increase of 3.1%.
This group accounted for 18.5% of total world oil production in 2002.
Rest of the World

The oil production of the remaining countries of the world, which are
not included in the above groups, rose 4.4% in 2002, from about 8.6 million
b/d in 2001 to about 9 million. The biggest increases were recorded by
Angola (about 204,000 b/d), Brazil (about 185,000 b/d), and Denmark,
India, and Malaysia (about 20,000 b/d each). Other countries in the group
recorded declines in their production. This group accounted for 13.5% of
total world oil production.
3-1-2 NGL Production in OAPEC Members and the World

There was a slight increase, of no more than 5,000 b/d, in the OAPEC
members’ production of natural gas liquids (NGL) in 2001. Their output
rose to about 1.98 million b/d. The increase was attributable to a rise in the
UAE’s output from 215,000 b/d in 2000 to 220,000 b/d in 2001.
68 Oil and Gas
Major NGL producers among OAPEC countries are Algeria (about

781,000 b/d) and Saudi Arabia (about 706,000 b/d). OAPEC members
accounted for 36.5% of world production of NGL, which totaled about
5.43 million b/d in 2001.
The daily output of other Arab countries, namely Oman and Yemen,
remained unchanged from 2000. Their contribution brought the total Arab
production of NGL to about 2 million b/d, which constitutes 36.9% of total
world production, as shown in Table (2-9).
World production of hydrocarbon liquids totaled about 72.73 million
b/d in 2001, compared with about 72.81 million in 2000.
OAPEC member countries accounted for 29.1% of the world total,
and the Arab states together accounted for 31.3%, as shown in Table (2-8).
3-2 Natural Gas Production
World production of natural gas continued to rise in 2001, reaching

about 3.18 trillion cubic meters compared with 3.1 trillion in 2000, an
increase of 2.7%, as shown in Table (2-10).
Marketed natural gas also increased in 2001, from about 2.5 trillion
cubic meters in 2000 to about 2.56 trillion, a rise of 2.3%, as shown in
Table (2-11).
The percentage of total world marketed gas is estimated at about 80%

of total production. Less gas is marketed than that produced owing to the
quantities that are reinjected into oil reservoirs to boost their productivity.
All producing countries strive to reduce the quantities that are lost and
to cut the flaring of gases that result from separating the natural gas
associated with oil.
The increase in world natural gas production in 2001 was attributable
to Iran, Venezuela, Nigeria, Oman, Qatar, Saudi Arabia, Egypt, and
Norway. Decreases in production were recorded by the CIS, Algeria, Iraq,
the UK, and Mexico, but they were smaller in total than the increases, so
they did not have a negative impact on world production.
Figure (2-14) shows the distribution of world natural gas production

in 2001. Major developments in natural gas production in 2001 are
reviewed by international grouping below.
Figure 2-14
World Production of Natural Gas by International Grouping,
2001
CIS
23.2% OAPEC
Others Members
23.6% 12.3%
Non-Arab
OPEC North America
10.0% 30.8%
3179
Billion cubic meters
OAPEC members’ total production of natural gas rose in 2001 to

about 392.3 billion cubic meters, which was 2.8% higher than their 2000
total of about 381.6 billion.
Several members contributed to the increase, including Bahrain,
where output rose 3%, from 11.7 billion cubic meters to 12 billion, Egypt,
whose production jumped 14.4%, from 24.4 billion cubic meters to about
27.9 billion, and Libya, where output increased 5.4%, from 10.2 billion
cubic meters to about 10.7 billion.
Other increases were recorded in Qatar, whose production soared
11.7%, from 40.7 billion cubic meters to about 45.5 billion, Saudi Arabia,
where a 6.6% rise boosted production from 53.5 billion cubic meters to 57
billion, Syria, whose output increased 1.4%, from 7.4 billion cubic meters
to 7.5 billion, and the UAE, whose production soared 9.5%, from 52.6
billion cubic meters to about 57.6 billion.
Decreases in natural gas production were recorded by Algeria, whose
output fell 3.9%, from 163 billion cubic meters in 2000 to about 156.7
billion in 2001, Iraq, where production declined 14.7%, from 5.1 billion
cubic meters to about 4.4 billion, and Kuwait, where it dropped 1%, from
about 10.8 billion cubic meters to 10.7 billion. Tunisia’s natural gas
production remained at its 2000 level of about 2.4 billion cubic meters.
70 Oil and Gas
Other Arab countries also recorded a rise in natural gas production.

That of Oman soared 41.3%, from about 15.5 billion cubic meters to about
21.9 billion, while Yemen’s production increased 14.5%, from 18.9 billion
cubic meters to 21.6 billion.
The quantities of gas marketed in Yemen total less than 1.3 billion
cubic meters because most of the natural gas produced is reinjected into the
reservoirs.
The natural gas production of all the Arab states totaled about 435.8
billion cubic meters, which represented 13.7% of the world total of 3.18
trillion cubic meters.
OAPEC member countries accounted for 12.3% of the world total, as

The marketed gas in OAPEC member countries amounted to about

69% of total natural gas production in 2001. A large proportion of the
remaining gas was reinjected into the oil reservoirs to boost their
productivity.
The marketed gas in the Arab countries as a whole was about 66% of
the total production.
Marketed gas in OAPEC member countries accounted for 10.6% of
the world total in 2001, while the Arab countries together accounted for
16.4% of all the gas marketed worldwide.
OPEC Countries
Natural gas production in OPEC countries as a whole rose 5.9% in
2001, from about 623.9 billion cubic meters in 2000 to about 661 billion.
The production of non-Arab OPEC members rose 10.6%, from 288.1
billion cubic meters in 2000 to about 318.5 billion in 2001.
Natural gas production in Indonesia rose 0.9%, from 83.1 billion cubic
meters to about 83.9 billion, while that of Iran soared 15%, from 109.6
billion cubic meters to about 126 billion, and that of Venezuela increased
13.6%, from 34.9 billion cubic meters to 39.6 billion.
Figure (2-15) shows the evolution of natural gas production in OPEC
countries in the period 1998-2001.
OPEC countries accounted for 20.8% of total world production of
natural gas in 2001 and for about 16.4% of total marketed gas.
Figure 2-15
Natural Gas Production in OAPEC and OPEC Member Countries,
1998-2001
(Billion cubic meters/year)
700
600
500
400
300
200
100
0
1998 1999 2000 2001
North Sea
The UK’s production of natural gas declined for the first time in 2001,
following a sustained increase over a decade. It fell 2.2%, from about 116.8
billion cubic meters in 2000 to 114.2 billion. Norway’s production, in
contrast, rose 3.3%, from about 90.3 billion cubic meters to 93.2 billion.
The volume of natural gas marketed by the UK in 2001 amounted to
about 106 billion cubic meters, while that marketed by Norway totaled 54.6
billion.
This group account for 6.5% of total world production of natural gas
and for about 6.3% of the gas marketed worldwide.
North America
The US production of natural gas rose 2.4% in 2001, from 693.2
billion cubic meters to about 709.5 billion. Canada’s production increased
2%, from 217.6 billion cubic meters to about 221.9 billion.
In contrast, Mexico’s production declined 0.5%, from 49.1 billion
cubic meters to about 48.8 billion.
The countries of this group accounted for 30.8% of world natural gas
production and for 30.2% of world marketed gas in 2001. The marketed
natural gas rate in these countries averaged 79% of the total production.
72 Oil and Gas
CIS and China

The Russian Federation’s production of natural gas continued to
decline in 2001. It dropped 1.5% from its 2000 level of 594.3 billion cubic
meters to about 585.3 billion. Although the production of Kazakhstan rose
0.9%, that of Turkmenistan 9.1%, and that of Uzbekistan 11.8%, the overall
production of the Commonwealth of Independent States declined 0.5%,
from about 741.5 billion cubic meters to about 737.8 billion. China’s
production, on the other hand, rose 11.8%, from 27.1 billion cubic meters to
30.3 billion in the same period.
China markets 100% of its gas production, while the CIS markets
98% of its total production of natural gas.
The countries of this group account for 24.2% of the world’s
production of natural gas and for 29.3% of the gas marketed worldwide.
Rest of the World

The natural gas production of the remaining countries of the world
ranged between small increases and decreases in 2001, but the net result
was a slight increase of 2.8% in their total production, which rose from
about 456.5 billion cubic meters in 2000 to about 469.1 billion in 2001.
Rises in production were recorded in Australia, Brazil, Colombia,
Gabon, India, Malaysia, the Netherlands, and New Zealand. Decreases were
recorded in Angola, Chile, Ireland, and Romania.
The countries of this group accounted for about 14.8% of total world
production of natural gas and for about 15.7% of all the gas marketed
worldwide.
II. COAL
1. World Developments
Proven world reserves of coal in 2001 remained approximately at their
2000 level of 984.5 billion tons, as shown in Table (2-12).
The world’s largest coal reserves are concentrated in North America,
which accounted for about 26.0% of world reserves at the end of 2001
(with the USA alone accounting for 25.0%), followed by the countries of
the Former Soviet Union with 23.0%, China with 11.0%, Australia and
India with 8% each, and Germany with 6.0%, as shown in Figure (2-16).
Figure 2-16
World Coal Reserves, End 2001
984.5
Billion tons
FSU
Africa
23.4%
5.6%
North America
26.1%
Asia & Oceania Europe South America

29.8% 12.8% 2.3%
World production of coal rose from 4534 million tons in 2000 to 4737
million in 2001. Hard coal accounted for most of the production, with an
estimated total of about 3834 million tons, of which China produced 1294
million tons, the USA 945 million tons, and India 312 million tons, as
shown in Table (2-13) and Figure (2-17).
Production of brown coal totaled 903 million tons, of which about

20% was produced by Germany.
Figure 2-17
World Production of Hard Coal, 2001
Australia Russia Rest of World

6.7% 4.4% 16.5%
South Africa
5.8%
India
8.1%
China
33.8%
USA
24.6%
3834
Million tons
74 Oil and Gas
World consumption of hard coal in 2001 was estimated at about 3799

million tons, which was distributed among international groupings as
follows:
Asia-Pacific 52.5%
North America 25%
Europe 10%
FSU 7.5%
Rest of the World 5%
International trade in hard coal totaled about 625 million tons in 2001.
Australia topped the list of exporters with exports totaling 192.8 million
tons, followed by China with 90.9 million, South Africa with 69.3 million,
Indonesia with 66.4 million, the USA with 44.1 million, the Russian
Federation with 40.7 million, Colombia with 37.3 million, Canada with
30.2 million, and Poland with 23.0 million tons.
The main importers of hard coal are Japan, whose imports totaled
136.8 million tons, South Korea with 64.9 million, Taiwan with 48.9
million, the UK with 35.5 million, and India with 20.8 million tons. The
imports of the 15 EU countries totaled 190.3 million tons.
The international steel industry consumes about 15% of all hard coal
production (about 600 million tons in 2001), since 70% of the industry
depends on coal. Coal accounts for 39.1% of world electricity generation.
Countries that rely heavily on coal for power generation include Poland
(96%), South Africa (88%), China (78%), Australia and India (77% each),
the Czech Republic (72%), Greece (67%), the USA (52%), and the 15 EU
countries (27%).
Since coal is the most environmentally harmful fuel and most of its
reserves lie in the industrial countries, these countries are trying hard to turn
it into a clean (green) fuel. The USA has placed great emphasis on this goal
in its energy plan. Research centers are working round the clock to find a
way to convert coal to gas in the coal mines so as to cut the gas emissions
into the atmosphere. In the Arab countries there were no significant
developments in the coal mining industry in 2001.
III. NUCLEAR ENERGY

At the end of 2002 the number of nuclear power reactors in operation
numbered 442 with a total design capacity of 356,746 megawatts, as shown
in Table (2-14). A total of 35 reactors were in the planning or building
stage, with a total capacity of 27,734 megawatts.
Between mid-2001 and the end of 2002 two new reactors came into
service in China with a total capacity of 1,548 megawatts, two in South
Korea with a capacity of 1,900 megawatts, and one in Japan with a capacity
of 598 megawatts. In the Russian Federation one reactor with a capacity of
950 megawatts was brought back into service, and two reactors with a
capacity of 470 megawatts were mothballed in the UK.
The electricity generated by nuclear reactors in 2002 totaled about
2,404.8 terawatt-hours, which is equivalent to about 17% of total world
electricity generation. The future of nuclear energy remains ambiguous and
forecasts contradict one another, but the USA has given nuclear power
priority in its new plan.
Conventional uranium reserves that are recoverable at a cost of less
than $80/kg of uranium oxide (U3O8) are estimated at about 2.27 million
tons. Reserves recoverable at a cost of up to $130/kg of U3O8 are estimated
at about 2.96 million tons.
Most of the conventional uranium reserves are concentrated in ten
countries. Australia has 20.4%, Kazakhstan 18.2%, the USA 10.6%,
Canada 9.9%, South Africa 8.9%, Niger 5.5%, and the Russian Federation
4.3%.
Two Arab countries feature among the countries with uranium
reserves. Algeria (26,000 tons at a cost of less than $80/kg of U3O8) and
Somalia (6,600 tons at a cost of less than $130/kg of U3O8).
Uranium production has been in decline since 1997. It fell from
37,600 tons in that year to 32,600 tons in 1999. In general, uranium
production from mines has only met 60% of world demand since 1993,
with the rest being met by the uranium stocks built up since 1990 for
military and civilian purposes. Supplies of enriched uranium are also
obtained by decommissioning nuclear warheads.
Growth in demand for uranium is linked to the growth of nuclear
power usage. There is no problem in meeting world demand in the
foreseeable future, whatever the scenario.
IV. RENEWABLE ENERGY SOURCES

Renewable energy sources are those that regularly and spontaneously
renew themselves in nature. They include solar power, wind power,
hydropower, geothermal energy, and biomass power while Tide, Wave and
Ocean Power are considered as Renewable Energy Sources.
76 Oil and Gas
Numerous types of technology are available today for utilizing

renewable energy sources, but some still lack sophistication while others
are expensive. Some scenarios compiled by the International Energy
Agency (IEA) show that the share of renewable energy in the world energy
mix will decline from 13.8% in 2000 to 12.5% in 2030. In the USA alone
renewable energy consumption declined 12% in 2001.
1. Hydropower
Hydroelectricity meets 20% of the world’s electricity needs. World
hydroelectricity consumption in 2001 totaled 594.5 million tons of oil
equivalent (mtoe), which was 3.7% lower than the 2000 level of 616.9
mtoe.
1.1 Hydropower Projects Worldwide
There are currently hydropower projects with a total capacity of

105,000 megawatts under construction worldwide. In addition to generating
electricity, the installations will be used in such areas as irrigation, drinking
water supplies, flood control, and enhanced navigation. The biggest
development in hydropower capacity will take place in Asia, with 84,400
megawatts currently under construction, followed by South America with
14,800 megawatts, Africa with 2,403 megawatts, Europe with 2,211
megawatts, and North and Central America with 1,236 megawatts.
Hydroelectricity stations in Africa currently produce 76,000 gigawatt-
hours per year, with a total installed capacity of 20,300 megawatts. Asia has
installed hydroelectricity capacity totaling about 225,000 megawatts and a
production of about 754,000 gigawatt-hours per year.
China is the world leader in hydroelectricity development in terms of
maximum production capacity and size of projects. Projects currently
under way in China have a total capacity of 36,000 megawatts, and another
50,000 megawatts is in the planning stage. There is about 75,000
megawatts of capacity already installed in the country and this will rise to
125,000 megawatts by 2010.
India continues to implement its hydroelectricity program with 15,400
megawatts of capacity currently under construction. Some 18 projects with
a total capacity of over 3,000 megawatts have already been completed.
India pays great attention to hydroelectricity projects (both large and small)
because it wants to increase hydro’s share of total electricity from 25% to
40%.
Turkey has ambitious plans to develop hydropower plants with about

5,000 megawatts of capacity under construction. As of November 2000,
there were 120 hydroelectricity plants installed with a total capacity of
11,588 megawatts.
Iran also considers hydroelectricity to be a high priority. It has 8,000
megawatts of capacity under construction and another 12,000 megawatts in
the planning stage.
Installed hydroelectricity capacity in Austalia totals 7,501 megawatts
and in New Zealand 5,082 megawatts. Ten countries in South America
have hydro projects totaling 18,000 megawatts under construction. The
most active country in this field is Brazil with 12,000 megawatts of the
capacity under construction. Some 40 projects to be implemented in Brazil
have a planned capacity of 28,600 megawatts.
In North and Central America there are projects under construction
totaling about 1,250 megawatts in five countries. The biggest capacity is in
Canada, where there is potential for developing another 12,000 megawatts
at least in the long term.
In the USA the development of hydro projects continues to be
restricted by complex legal regulations and environmental opposition,
although the current administration has pledged to give more support to
renewable energy sources. There is only about 40 megawatts of
hydroelectricity capacity currently under construction in the USA.
In Europe there are hydro projects under construction in 23 countries
with a total capacity of at least 2,210 megawatts, among which 1,060
megawatts in Germany. At least 8,000 megawatts more is forecast to be
built in future, with Italy accounting for a possible 3,100 megawatts in the
next ten years.
1.2 Hydroelectricity Projects in the Arab Countries

Sudan has identified technically feasible hydroelectricity projects in
the country as having a total capacity of 4,800 megawatts and two projects
are already under study. Algeria has limited hydropower installed so far,
representing less than 2% of total electricity production, but the country’s
potential capacity is estimated at about 1,500 gigawatt-hours.
Egypt is pursuing its program of installing hydroelectric facilities on
the Nile River dams, which will add about 200 megawatts to the country’s
capacity. In Morocco, about 90 megawatts of capacity is currently under
construction and in Lebanon several medium-sized projects are under study.
78 Oil and Gas
2. Wind Power
2.1 Wind Power Worldwide

Wind power is one of the world’s fastest growing energy sources.
Now it provides electricity for about 14 million houses, or 35 million
people. There are more than 55,000 wind turbines installed in various parts
of the world, over US $5 billion is invested in wind power and the amount
is growing by 40% per year, and approximately 70,000 people are
employed in the industry.
At the World Summit on Sustainable Development -WSSD-
(Johannesburg, 26 August-4 September 2002) and at the Eighth Meeting of
the Conference of Parties to the UN Convention on Climate Change (New
Delhi, 23 October-1 November 2002), the European Wind Energy
Association (EWEA) launched its industrial strategy called ‘Wind Force
12.’ This aims to boost the percentage of electricity supplied by wind power
worldwide to 12% and to raise installed wind capacity to 1,260,000
megawatts by 2020. The ‘Wind Force 12’ strategy shows that by 2010 the
wind power industry will have 230,000 megawatts of installed capacity
worldwide, including 100,000 megawatts in Europe. In 2001, an installed
capacity of 6,800 MW was added to the power grid.
Canada is planning to expand its installed wind capacity to 10,000
megawatts by 2010, compared with just 125 megawatts in 2000. The
Australian Wind Energy Association has pledged to increase the wind
power generating capacity in the country from 72 megawatts in 2001 to
5,000 megawatts by 2010.
The Norwegian government is planning to develop three wind farms
on the west coast of the country with an estimated total capacity of 800
megawatts. By the end of 2001, the wind power installed capacity in the
USA totaled 4,245 megawatts, while in India it totaled 1,456 megawatts.
According to the survey conducted by the EWEA, shows that by
Autumn 2002 the installed wind capacity in Europe had reached 20,447
megawatts, which represented about 74% of world’s capacity.
Germany is the leading European country in this field, with 10,650
megawatts of capacity, followed by Spain with 4,079 megawatts, and
Denmark in third place with 2,515 megawatts. According to the EWEA
sources, cumulative wind energy installed capacity in the world had
reached 27,257 megawatts by the autumn of 2002.
2-2 Wind Power in the Arab Countries

Morocco announced in April 2000 its intention to build a wind power
station with a capacity of 10 megawatts in the city of Tetouan. It is also
keen to build two farms in the north and south of the country. The National
Electricity Bureau has set aside $200 million for a wind turbines installation
project with a capacity of 200 megawatts in Tangier and Tarfaya.
Moreover, a joint project with France aims to build a wind farm with a
capacity of 50 megawatts in the northern region of El-Kidye el-Baida.
Egypt’s Ministry of Electricity and Energy signed a contract at the end
of December 2002 with the German-Danish program to build the second
phase of a wind power station that will add another 30,000 kilowatts of
capacity bringing the total to 95,000 kilowatts. The ministry has also
indicated that it is working on a series of wind farms that will provide
600,000 kilowatt-hours by 2010. Egypt is also planning to build a wind
farm with a capacity of 600 megawatts in the Zaafarana region on the Red
Sea by 2005.
In Syria installed wind power capacity does not exceed 900 kilowatts,
but there is a plan to install wind turbines with a capacity of 1,750
megawatts. These will provide about 3,500 million kilowatt-hours per year
and boost wind power’s share of total electricity demand to at least 5% by
2020.
3. Solar Power
3.1 Solar Power Worldwide

The solar power industry is witnessing ‘increasing’ growth
worldwide. A report published by the International Energy Agency (IEA) in
September 2002 showed a 35% increase in photovoltaic energy installed
worldwide in 2001. World production of photovoltaic cells rose from
287.65 megawatts in 2000 to 390.54 megawatts in 2001. The top ten
companies produced 336.24 megawatts, or 86% of the world total
production. Japanese companies took the first and third places with 75 and
54 megawatts, respectively.
Japan’s production of photovoltaic cells rose 31% from 128.6
megawatts in 2000 to 171.22 megawatts in 2001. The Japanese government
aims to boost its production to over 500 megawatts, of which 250
megawatts will be for the local market and 250 megawatts for exports.
European production of photovoltaic cells rose 42%, from 60.66
megawatts in 2000 to 86.38 in 2001. Similarly US production rose, from
74.97 megawatts in 2000 to 100.32 megawatts in 2001, or by 34%. Overall,
80 Oil and Gas
world production of solar power increased 39% in 2001, from 23.42

megawatts in 2000 to 32.62 megawatts. Most of the growth was due to
increased production by BP Solar in India (8.06 megawatts), Australia (6.96
megawatts), Hong Kong, Malaysia, and others.
Regarding future projects, the Australian energy company Enviro
Mission Ltd announced at the beginning of 2003 that it would build a 1000-
meter high solar power tower in New South Wales by 2006. The tower will
have a solar capacity of 200 megawatts and will cost US$563 million. The
tower will generate about 650 gigawatt-hours per year. The project is being
funded by the Australian government, which considers it to be of national
importance.
3-2 Solar Power in the Arab Countries

Jordan is building an electricity station in Aqaba with a capacity of
100-150 megawatts, powered by solar energy and heavy fuel or natural gas.
It is estimated the project will cost about $200 million. Egypt is installing
an electricity station powered by gas and solar energy. Several other Arab
countries have solar power projects under way.
4. Geothermal Power
4.1 Geothermal Power Worldwide
4-1-1 Power Generation Uses

The capacity of geothermal power stations worldwide totaled 7,974
megawatts at the beginning of 2000, while in the spring of 2002 it
amounted to 8227.22 megawatts. Despite unavoidable delays, it is expected
that at least 400 megawatts will be added and operating regularly by the
beginning of 2003.
The major users of geothermal power for electricity generation are the
USA with a capacity of 2,228 megawatts, followed by the Philippines with
a capacity of 1,909 megawatts, and Mexico with a capacity of 755
megawatts. Austria recently joined the club of geothermal power producers.
A small plant in Austria came on stream in July 2001 with a capacity of just
250 kilowatts.
It is clear that the growth rate of installed geothermal power capacity
worldwide depends on the speed of exploration and the construction of new
plants, in addition to technological progress.
4-1-2 Non-electrical Uses

According to a survey conducted for the World Geothermal
Conference 2000, installed capacity in factories using geothermal power in
direct, non-electrical applications (such as space and water heating) totaled
15,580 megawatts.
Such installations are located in Asia (3820.9 megawatts), North
America (4741.8 megawatts), and Western Europe (3871 megawatts). In
the Middle East (including Turkey) capacity totaled 1037.6 megawatts,
while just 0.3% of he world total was accounted for by Central America
(5.0 megawatts) and South America (42.5 megawatts).
The countries with the biggest thermal power capacity are the USA
(4200 megawatts), China (2282 megawatts), and Inceland (1469
megawatts).
4-2 Future of Geothermal Power

In theory, it would be possible, using current technology and the
geothermal resources known worldwide, to generate between 35,448 and
72,392 megawatts of electricity, which would be sufficient to meet the
needs of 865 million people, or about 17% of the world’s population.
Thirty-nine countries have been identified where geothermal power could
provide 100% of their energy requirements, mostly in Africa and the Pacific
Ocean, with a total population of 620 million people.
4-3 Geothermal Power in the Arab Countries

More than 200 thermal sources with temperatures exceeding 45
degrees centigrade have been identified in northern Algeria. Some sources
have temperatures as high as 118 degrees, which could be used in
agriculture and animal husbandry. Other geothermal sources are located in
Djibouti, Yemen, Syria, and other Arab countries.
4-4 Solid Biomass Energy
4-4-1 Solid Biomass Energy Worldwide
Biomass is produced from organic animal and plant waste. It can be

treated using sulfuric fermentation or thermal combustion, each of which
gives different products, such as methane or chemical fertilizers. Ethanol,
apart from being an organic gas, is one of the best types of fuel derived
from biomass, primarily from maize and sugar crops.
82 Oil and Gas
Power generation from solid biomass in the OECD countries rose

2.5%, from 64,789 gigawatt-hours in 1990 to 83,244 gigawatt-hours in
2000. Solid Biomass is the second biggest renewable source of energy after
hydroelectricity in terms of usage, accounting for about 5.5% of electricity
generation from renewable sources in 2000.
Some 50% of the electricity produced from solid biomass comes from
the USA (41,616 gigawatt-hours), where biomass accounts for 12.5% of the
electricity generated from renewable sources. Japan comes next with
11,309 gigawatt-hours of electricity from biomass, which accounts for
10.5% of renewable electricity generation. Among OECD countries Finland
takes third place with 8,476 gigawatt-hours, the whereas percentage of
electricity from renewable sources accounted for biomass reached (36.4%).
Non-commercial biomass represents a quarter of total energy demand
in the developing countries. It is expected that biomass use will rise in these
countries from 981 mtoe in 2000 to 1,019 mtoe in 2030. However, its
expanded use requires the introduction of new technology to raise its
efficiency and curb the health risks.
4-4-2 Solid Biomass in the Arab Countries

A large proportion of the population of some Arab states, such as
Somalia, Sudan, and Yemen, rely on biomass to meet their energy needs in
a conventional manner. Indeed, the use of biomass is common throughout
the rural areas of most Arab states. There are no reliable statistics on the use
of biomass for electricity generation, but some Arab states have built plants
to process plant waste and produce organic fertilizers. The plants may be
converted to produce organic gas in future.
5. Tidal, Wave, and Ocean Power
Electricity produced from the tides, the waves, and the oceans totaled
605 gigawatt-hours in 2000, with a growth rate of 0.1% between 1990 and
2000.
The largest producer of electricity from water motion power is France
with a production of 573 gigawatt-hours in 2000. Canada followed in
second place with 32 gigawatt-hours.
So far the technology for generating electricity using ocean power is
still experimental and requires further technical and economic development,
since it is extremely expensive at present compared with other energy
sources.
86 Tables
TABLES OF CHAPTER TWO - PART ONE
Table 2-1
Seismic Surveys in OAPEC Members and
(Crew/months)
1998 1999 2000 2001 2002*

Algeria 123 97 79 70 80
Bahrain 4 3 2 - 3
Egypt 93 48 37 28 26
Iraq 24 9 24 24 -
Kuwait 23 - - - -
Libya 49 36 40 39 58
Qatar 2 5 6 14 3
Saudi Arabia 60 60 66 90 120
Syria 32 30 30 26 30
Tunisia 11 8 9 17 4
UAE 16 14 19 31 37
Total OAPEC 437 310 312 339 361
Oman 72 77 25 27 47
Sudan 37 1 1 6 7
Yemen 16 17 39 39 28
* Estimates.
Sources:
- IHS Energy Group, 2002 issues.
- IHS Energy Group - Annual Synopsis, 2001.
- OAPEC Data Bank.
Tables 87
Table 2-2
Active Drilling Rigs in OAPEC Member Countries
and the World, 1998-2002
(At year end)
1998 1999 2000 2001 2002*

Algeria 21 12 17 19 21
Bahrain 3 3 3 1 2
Egypt 18 15 20 22 25
Iraq 7 9 9 9 na
Kuwait 13 13 13 13 13
Libya 15 14 14 19 18
Qatar 13 5 5 10 11
Saudi Arabia 27 20 27 32 33
Syria 24 23 23 23 26
Tunisia 2 3 3 3 8
UAE 28 27 24 28 26
Total OAPEC 171 144 158 179 183
Oman 25 19 26 24 32
Sudan - 3 4 4 3
Yemen 3 6 8 10 11
North America 938 1070 1453 1415 1194
Rest of the world 436 353 486 533 564
World total 1573 1595 2135 2165 1987
* Estimates.
Note: Workover rigs are included in some countries.
Sources:
- OAPEC Data Bank.
- World Oil, Jan. 2003.
88 Tables
Table 2-3
Exploratory and Developmental Wells Drilled in OAPEC
Members and Other Arab Countries, 1998-2002
(Wells)
1998 1999 2000 2001 2002*

Algeria 85 134 137 170 182
Bahrain 15 15 26 22 28
Egypt 194 169 197 192 197
Iraq 12 12 14 16 na
Kuwait 56 99 138 100 75
Libya 123 90 76 97 116
Qatar 117 66 68 87 89
Saudi Arabia 304 224 257 265 326
Syria 119 102 122 117 126
Tunisia 18 20 15 14 21
UAE 125 98 87 92 110
Total OAPEC 1168 1029 1137 1172 1270
Oman 329 284 320 345 360
Sudan 56 47 23 48 50
Yemen 50 53 80 84 120
* Estimates.
Sources:
- OAPEC Data Bank.
- World Oil, Aug. 2002.
Tables 89
Table 2-4
Exploratory and Developmental Drilling in OAPEC
Members and Other Arab Countries,
1998-2002
(Kilometers)
1998 1999 2000 2001 2002*

Algeria 237 391 424 511 591
Bahrain 10 10 21 18 23
Egypt 518 376 555 508 538
Iraq 33 28 30 35 na
Kuwait 158 241 319 231 173
Libya 290 212 174 225 324
Qatar 260 147 162 243 231
Saudi Arabia 751 558 630 654 802
Syria 277 257 285 273 413
Tunisia 50 35 35 32 48
UAE 421 275 242 257 306
Total OAPEC 3005 2530 2877 2987 3449
Oman 688 574 701 757 790
Sudan 126 134 49 93 102
Yemen 105 111 124 92 252
* Estimates.
Sources:
- OAPEC Data Bank.
- World Oil, Aug. 2002.
90 Tables
Table 2-5
Petroleum Discoveries in OAPEC Members and
1998 1999 2000 2001 2002*

Oil Gas Oil Gas Oil Gas Oil Gas Oil Gas
Algeria 17 3 3 - 8 3 3 3 3 -
Bahrain - - - - - - - - - -
Egypt 24 15 20 8 24 7 12 10 22 10
Iraq - - 1 - - - 1 1 - 2
Kuwait 1 - 1 - 1 1 1 - 2 -
Libya 7 1 2 - 1 1 2 - 3 -
Qatar - - - - - - - - - -
Saudi Arabia - 2 - 2 - 3 1 - 2 -
Syria - - 2 3 1 - 1 - - 3
Tunisia 6 1 1 - 1 - 3 - 2 1
UAE - - - 1 - - - - - -
Total OAPEC 55 22 30 14 36 15 24 14 34 16
Oman 7 4 2 - 2 1 7 2 8 3
Sudan - - 6 - - - 3 - 5 -
Yemen 2 - 2 - 3 1 2 - 9 -
Total Arab countries 64 26 40 14 41 17 36 16 56 19
* Estimates.
Sources:
- OAPEC Data Bank.
Tables 91
Table 2-6
Arab and World Oil Reserves, 1998-2002
(Billion barrels at year end)
(%)
1998 1999 2000 2001 2002 Change
2002/2001
Algeria** 11.31 11.31 11.31 12.00 12.00 0.0
Bahrain 0.16 0.15 0.15 0.13 0.13 0.0
Egypt** 3.50 3.50 3.70 3.70 3.70 0.0
Iraq 112.50 112.50 112.50 115.00 115.00 0.0
Kuwait * 96.50 96.50 96.50 96.50 96.50 0.0
Libya** 29.50 29.50 36.00 36.00 36.00 0.0
Qatar 4.50 4.50 13.16 15.21 15.21 0.0
Saudi Arabia * 261.50 262.80 262.80 262.80 262.80 0.0
Syria** 2.50 2.50 2.50 3.15 3.15 0.0
Tunisia 0.31 0.31 0.31 0.31 0.31 0.0
UAE 97.80 97.80 97.80 97.80 97.80 0.0
Total OAPEC 620.08 621.37 636.73 642.60 642.60 0.0
Oman** 5.56 5.74 5.85 5.85 5.85 0.0
Sudan 0.20 0.26 0.26 0.81 0.81 0.0
Yemen 4.00 4.00 4.00 4.00 4.00 0.0
Total Arab
629.84 631.37 646.84 653.26 653.26 0.0
countries
Indonesia 4.98 5.20 5.10 5.12 5.12 0.0
Iran 93.70 93.10 99.53 99.08 99.08 0.0
Nigeria 22.50 29.00 31.51 31.51 31.51 0.0
Venezuela 76.11 76.85 76.85 77.69 77.81 0.2
Total non-Arab
197.29 204.15 212.99 213.40 213.52 0.1
OPEC
Total OPEC 810.90 819.06 843.06 848.71 848.83 0.0
Cont./
92 Tables
Table 2-6 Cont.

(%)
1998 1999 2000 2001 2002 Change
2002/2001
Canada 4.93 4.93 4.71 4.86 4.86 0.0
China 24.00 24.00 24.00 24.00 18.25 (24.0)
CIS 57.00 57.00 57.00 57.00 77.83 36.5
Of which: Azerbaijan 1.18 1.18 1.18 1.18 7.00 493.2
Kazakhstan 5.42 5.42 5.42 5.42 9.00 66.1
Russia 48.57 48.57 48.57 48.57 60.00 23.5
Turkmenistan 0.55 0.55 0.55 0.55 0.55 0.0
Uzbekistan 0.59 0.59 0.59 0.59 0.59 0.0
Mexico 47.82 28.40 28.26 26.94 12.62 (53.2)
Norway 10.91 10.79 9.45 9.45 10.27 8.7
UK 5.20 5.15 5.00 4.93 4.72 (4.3)
USA 22.55 21.03 21.77 22.05 22.45 1.8
Rest of the world 45.37 46.81 47.60 47.54 51.02 7.3
World total 1044.91 1033.63 1057.62 1063.43 1068.80 0.5
OAPEC/ world (%) 59.3 60.1 60.2 60.4 60.1 -
Arab countries/
60.3 61.1 61.2 61.4 61.1 -
world (%)
OPEC/ world (%) 77.6 79.2 79.7 79.8 79.4 -
* Includes half of the reserves of the Divided Zone.
** Official sources.
Note:
- Parenthesis denote negative figures.
- Some references indicate that Canada's oil reserves reach 180 billion barrels,
including that of oil sand.
Sources:
- OAPEC Data Bank.
- Oil & Gas Journal, 23 Dec. 2002.
- OPEC Annual Statistical Bulletin, 2001.
Tables 93
Table 2-7
Arab and World Natural Gas Reserves, 1998-2002
(Billion cubic meters at year end)
(%)
1998 1999 2000 2001 2002** Change
2002/2001
Algeria 4077 4523 4455 4455 4523 1.5
Bahrain 118 110 110 92 92 0.0
Egypt* 1019 1223 1444 1557 1657 6.4
Iraq 3110 3109 3109 3100 3100 0.0
Kuwait 1482 1480 1557 1557 1557 0.0
Libya 1313 1314 1274 1314 1314 0.0
Qatar* 8500 10900 11152 14611 25485 74.4
Saudi Arabia* 5790 5790 6193 6343 6343 0.0
Syria* 241 241 241 371 371 0.0
Tunisia 78 78 78 78 78 0.0
UAE* 6003 6003 6003 6003 6003 0.0
Total OAPEC 31731 34771 35616 39481 50523 28.0
Oman* 824 829 859 859 859 0.0
Sudan 85 85 85 85 85 0.0
Yemen* 396 396 396 396 396 0.0
Total Arab
33036 36081 36956 40821 51863 27.0
countries
Indonesia 3902 3650 3770 3790 3800 0.3
Iran 23000 23001 23002 23002 26600 15.6
Nigeria 3510 3568 3610 4503 4503 0.0
Venezuela 4147 4152 4152 4163 4174 0.3
Total non-Arab
34559 34371 34534 35458 39077 10.2
OPEC
Total OPEC 64834 67490 68277 72841 87402 20.0
94 Tables
Table 2-7 Cont.

(%)
1998 1999 2000 2001 2002** Change
2002/2001
Canada 1809 1809 1728 1691 1702 0.6

China 1368 1368 1368 1368 1510 10.4
CIS 55982 55982 55982 55416 55291 (0.2)
Of which: Azerbaijan 125 125 125 125 850 580.0
Kazakhstan 1841 1841 1841 1841 1841 0.0
Russia 48138 48138 48138 47572 47572 0.0
Turkmenistan 2860 2860 2860 2860 2011 (29.7)
Uzbekistan 1875 1875 1875 1875 1875 0.0
Mexico 1797 851 861 835 249 (70.2)
Norway 1173 1172 1247 1247 2189 75.5
UK 765 755 760 735 697 (5.2)
USA 4735 4645 4740 5024 5195 3.4
Rest of the world 12868 13029 13601 14898 14947 0.3
World total 148092 150063 151777 157494 172720 9.7
OAPEC/world
21.4 23.2 23.5 25.1 29.3 -
(%)
Arab countries/
22.3 24.0 24.3 25.9 30.0 -
world (%)
OPEC/world
43.8 45.0 45.0 46.3 50.6 -
(%)
* Official sources.
** Estimates.
Note: Parenthesis denote negative figures.
Sources:
- OAPEC Data Bank.
Tables 95
Table 2-8
Arab and World Hydrocarbon Liquids Production, 1998-2002
(Thousand b/d)
First : Crude Oil Production
(%)
1998 1999 2000 2001 2002** Change
2002/2001
Algeria 827.3 749.6 796.0 842.4 850.0 0.9
Bahrain* 182.9 176.4 181.0 233.9 185.1 (20.9)
Egypt 809.0 771.0 768.3 760.0 750.0 (1.3)
Iraq 2181.1 2550.0 2700.0 2600.0 2355.0 (9.4)
Kuwait 2052.2 1873.3 1983.8 1947.2 1982.5 1.8
Libya 1449.0 1287.2 1347.2 1323.5 1300.0 (1.8)
Qatar 616.9 608.7 648.0 681.0 640.0 (6.0)
Saudi Arabia 8280.2 7564.0 8400.0 7915.0 7647.5 (3.4)
Syria 572.1 575.4 547.4 522.0 495.0 (5.2)
Tunisia 78.0 79.1 74.0 69.6 71.0 2.0
UAE 2244.1 2154.0 2280.0 2231.0 1984.5 (11.0)
Total OAPEC 19292.8 18388.7 19725.7 19125.6 18260.6 (4.5)
Oman 899.4 904.7 954.9 964.2 895.0 (7.2)
Sudan 12.0 56.8 193.0 230.0 230.0 0.0
Yemen 368.7 392.4 436.5 436.0 435.0 (0.2)
Total Arab
20572.9 19742.6 21310.1 20755.8 19820.6 (4.5)
countries
Indonesia 1315.4 1355.5 1272.5 1214.2 1120.0 (7.8)
Iran 3714.0 3439.0 3661.3 3707.0 3469.9 (6.4)
Nigeria 1939.0 1781.5 2053.6 2127.0 1930.0 (9.3)
Venezuela 3120.0 2800.4 2891.0 2821.0 2415.0 (14.4)
Total non-Arab
10088.4 9376.4 9878.4 9869.2 8934.9 (9.5)
OPEC
Total OPEC 27739.2 26163.2 28033.4 27409.3 25694.4 (6.3)
Cont./
96 Tables
Table 2-8 Cont.
(%)
1998 1999 2000 2001 2002** Change
2002/2001
Canada 2017.0 1900.8 2035.0 2052.4 2195.0 6.9
China 3199.9 3224.5 3237.0 3296.7 3400.0 3.1
CIS 7008.2 7125.7 7681.0 8210.8 8932.0 8.8
Of which: Azerbaijan 190.3 250.0 275.0 298.5 300.0 0.5
Kazakhstan 521.7 563.8 675.0 707.5 800.0 13.1
Russia 5919.0 5930.0 6325.0 6780.8 7385.0 8.9
Turkmenistan 120.2 140.0 140.0 160.0 180.0 12.5
Uzbekistan 157.7 151.0 155.0 145.0 150.0 3.4
Mexico 3071.1 2906.4 3012.0 3127.0 3180.0 1.7
Norway 3021.0 3017.6 3212.0 3244.6 3150.0 (2.9)
UK 2632.7 2724.9 2513.7 2330.8 2250.0 (3.5)
USA 6252.0 5881.5 5822.0 5801.2 5770.0 (0.5)
Rest of the world 7730.9 8527.8 8691.0 8613.3 8991.2 4.4
World Oil Production 65594.1 64428.2 67392.2 67301.8 66623.7 (1.0)
OAPEC/world (%) 29.4 28.5 29.3 28.4 27.4 -
OPEC/world (%) 42.3 40.6 41.6 40.7 38.6 -
Second : Natural Gas Liquids Production
Arab countries Production 1908.0 1863.0 1998.0 2003.0 na
World NGL Production 4895.0 4986.0 5421.0 5433.0 na
Third : Total Hydrocarbon Liquids Production

World Total Production 70489.1 69414.2 72813.2 72734.8 -
OAPEC/world (%) 30.20 29.40 29.90 29.10 -
Arab Countries/ world (%) 31.90 31.10 32.00 31.30 -
* Official sources.
** Estimates.
Note:
- 50% of the Divided Zone's oil production is added to that of both Saudi Arabia and Kuwait.
Sources:
- OAPEC Data Bank.
- Oil & Energy Trends, Annual Statistical Review, May 2002.
Tables 97
Table 2-9
NGL Production in OAPEC Members and Other Arab Countries,
1998-2001
(Thousand b/d)
1998 1999 2000 2001

Algeria 758 766 781 781
Bahrain* 12 10 10 10
Egypt 65 65 65 65
Iraq 15 20 20 20
Kuwait 23 20 20 20
Libya 40 40 60 60
Qatar 84 80 90 90
Saudi Arabia 711 666 706 706
Syria 11 10 10 10
Tunisia 1 1 1 1
UAE 165 165 215 220

Total OAPEC 1885 1843 1978 1983
Oman 10 10 10 10
Yemen 13 10 10 10
Total Arab
1908 1863 1998 2003
countries
World total 4895 4986 5421 5433
OAPEC/world (%) 38.5 37.0 36.5 36.5
* Official sources.
Sources:
- OAPEC Data Bank.
- Oil & Energy Trends, Annual Statistical Review, May 2002.
98 Tables
Table 2-10
Arab and World Natural Gas Production,
1998-2001
(Million cubic meters/year)
(%)
1998 1999 2000 2001** Change
2001/2000
Algeria 150060 159925 163030 156736 (3.9)
Bahrain 11125 11507 11665 12017 3.0
Egypt 18270 19650 24360 27868 14.4
Iraq 3800 4000 5100 4350 (14.7)
Kuwait 11113 10144 10777 10669 (1.0)
Libya 12600 9200 10150 10698 5.4
Qatar 26356 37828 40722 45487 11.7
Saudi Arabia* 49780 48690 53460 57000 6.6
Syria 7700 7800 7400 7500 1.4
Tunisia 2380 2380 2350 2350 0.0
UAE 48980 51000 52590 57588 9.5
Total OAPEC 342164 362124 381604 392263 2.8
Oman 10396 11567 15495 21890 41.3
Yemen 15300 16500 18900 21632 14.5
Total Arab
367860 390191 415999 435785 4.8
countries
Indonesia 84380 86880 83100 83872 0.9
Iran 89000 102600 109600 125996 15.0
Nigeria 31750 30700 34860 39585 13.6
Venezuela 61350 57070 60500 69007 14.1
Total non-Arab
266480 277250 288060 318460 10.6
OPEC
Total OPEC 569169 598037 623889 660988 5.9
Tables 99
Table 2-10 Cont.

(%)
1998 1999 2000 2001** Change
2001/2000
Canada 205070 210790 217560 221859 2.0
China 22190 24190 27100 30300 11.8
CIS 709360 723240 741460 737821 (0.5)
Of which: Azerbaijan 13040 13330 13780 13755 (0.2)
Kazakhstan 8240 9800 11500 11600 0.9
Russia 601100 602200 594300 585348 (1.5)
Turkmenistan 13300 22800 47000 51300 9.1
Uzbekistan 54790 55580 56400 57000 1.1
Mexico 49520 49520 49070 48815 (0.5)
Norway 74290 81790 90260 93196 3.3
UK 97510 107130 116770 114151 (2.2)
USA 677450 672660 693160 709521 2.4
Rest of the world 436986 446870 456490 469110 2.8
World total 2906716 2983631 3095929 3179018 2.7
OAPEC/world
11.8 12.1 12.3 12.3 -
(%)
OPEC/world
19.6 20.0 20.2 20.8 -
(%)
* Official sources.
** Estimates.
Sources:
- BP Statistical Review of World Energy, June 2002.
- OAPEC Data Bank.
- Petroleum Economist, Nov. 2002.
100 Tables
Table 2-11
Arab and World Marketed Natural Gas Production,
1998-2001
(Million cubic meters/year)
(%)
1998 1999 2000 2001** Change
2001/2000
Algeria 80878 85848 88617 84136 (5.1)
Bahrain 8380 8671 8789 8912 1.4
Egypt 13740 15840 19800 20957 5.8
Iraq 2950 3180 3150 2760 (12.4)
Kuwait 9000 8640 9600 9504 (1.0)
Libya 6360 5200 6000 6180 3.0
Qatar 19580 22050 29100 32505 11.7
Saudi Arabia* 46820 46200 49810 53695 7.8
Syria 4900 4800 5000 5500 10.0
Tunisia 1900 1900 1900 1900 0.0
UAE* 37070 38990 39840 44940 12.8
Total OAPEC 231578 241319 261606 270989 3.6
Oman 6273 6846 10870 15870 46.0
Yemen - - - 1274 -
Total Arab
237851 248165 272476 288133 5.7
countries
Indonesia 64250 70960 68365 69000 0.9
Iran 50000 56755 60147 69145 15.0
Nigeria 5900 6950 12460 15680 25.8
Venezuela 31440 26771 27801 31710 14.1
Total non-Arab
151590 161436 168773 185535 9.9
OPEC
Total OPEC 354248 371544 394890 419255 6.2
Tables 101
Table 2-11 Cont.

(%)
1998 1999 2000 2001** Change
2001/2000
Canada 170660 177370 183190 186810 2.0
China 22190 24190 27100 30300 11.8
CIS 691710 704710 723240 719690 (0.5)
Of which: Azerbaijan 5590 6000 5660 5650 (0.2)
Kazakhstan 8240 9800 11500 11600 0.9
Russia 590900 592000 584200 575400 (1.5)
Turkmenistan 13300 22800 47000 51300 9.1
Uzbekistan 54790 55580 56400 57000 1.1
Mexico 34330 36150 35820 35310 (1.4)
Norway 46200 49880 52880 54600 3.3
UK 89020 98710 108330 105900 (2.2)
USA 529750 527300 537620 550310 2.4
Rest of the world 374770 380460 390450 401244 2.8
World total 2348071 2408371 2499879 2557832 2.3
OAPEC/world
9.9 10.0 10.5 10.6 -
(%)
OPEC/world
15.1 15.4 15.8 16.4 -
(%)
* Official sources.
** Estimates.
Note:
- Reinjected, flared and gas losses are excluded data.
Sources:
- IEA Statistics, Natural Gas Information 2002.
- OAPEC Data Bank.
- Petroleum Economist, Nov. 2002.
102 Tables
Table 2-12
World Coal Reserves, 1998-2001
(Billion tons at year end)
1998 1999 2000 2001

Asia/Oceania 292.3 292.3 292.3 292.5
Of which: Australia 90.4 90.4 90.4 82.1
China 114.5 114.5 114.5 114.5
India 74.7 74.7 74.7 84.4
Indonesia 5.2 5.2 5.2 5.4
North America 255.3 255.3 255.3 256.6
Canada 8.6 8.6 8.6 6.6
USA 246.7 246.7 246.7 250.0
Former Soviet Union (FSU) 230.2 230.2 230.2 230.0
Europe (except FSU) 122.0 122.0 122.0 125.4
Of which: Germany 67.0 67.0 67.0 66.0
Poland 14.3 14.3 14.3 22.2
UK 1.5 1.5 1.5 1.5
Africa 61.4 61.4 61.4 55.4
Of which: South Africa 55.3 55.3 55.3 49.5
Central & South America* 21.6 22.8 22.8 23.0
Of which: Brazil 11.9 11.9 11.9 11.9
Colombia 6.8 6.7 6.7 6.6
Middle East 0.2 0.2 0.2 1.7
World total 983.0 984.2 984.2 984.5
* Mexico is classified within Central and South America.

Sources:
- bp Statistical Review of World Energy, June 2001and June 2002.
- BP Amoco Statistical Review of World Energy, June 1999 and 2000.
Tables 103
Table 2-13
World Coal Production, 1997-2001
(Million tons/year)
1997 1998 1999 2000 2001

World total 4676 4551 4345 4534 4737
Of which: Hard coal 3775 3656 3466 3639 3834
Brown coal 901 895 879 895 903

Significant Producers of
Hard coal
China 1325 1233 1029 1171 1294
USA 909 936 914 899 945
India 310 303 290 310 312
South Africa 220 223 225 238 224
Australia 208 219 224 225 257
Russia 157 149 163 169 168
Kazakhstan 71 74 81 81 73
Ukraine 70 67 74 79 82
Germany 51 61 56 71 71
Rest of world 316 275 298 294 304
Sources:
- World Coal Institute: Website .
- E. coal : various issues .
48 Oil and Gas
CHAPTER TWO
ARAB AND WORLD DEVELOPMENTS IN

THE EXPLORATION, RESERVES AND PRODUCTION OF
ENERGY RESOURCES
I. OIL AND GAS
1. Exploration and Production: An Overview
There was a significant decline in exploration activity in the second

quarter of 2002 owing to the slump in oil prices at the end of 2001 and
beginning of 2002. Both seismic surveying activity and the number of wells
drilled dropped about 20% below their 2001 level. Although by the end of
the year drilling activity had increased to approximately the same level as
the beginning of the year, as oil prices started to recover, seismic surveying
activity remained weak compared with 2001. Moreover, oil production
levels were lower at the beginning and end of 2002 than in 2001. As OPEC
countries exceeded their quotas by as much as 2.7 million b/d, according to
some sources, in response to large output increases by non-OPEC
producers, oil production levels at the end of 2002 stood 3% higher than at
the beginning of the year.
The main rise outside OPEC was by Russia, whose output soared by
about 0.6 million b/d, but other increases were implemented by Angola,
Brazil, Canada, and Kazakhstan. However, despite these increases, world
oil production in 2002 was 1% lower than in 2001 and for the second year
running the forecast growth in oil production, estimated by the International
Energy Agency at about 1.6% a year, was not achieved.
The decline in exploration activity did not hamper the realization of
increases in world reserves of oil and natural gas, which rose by 0.5% and
9.7%, respectively, compared with the previous year. Sufficient reserves
were added to compensate for world production of both oil and natural gas
in 2002, as world oil reserves rose for the third consecutive year and world
natural gas reserves rose for the seventh consecutive year. The 2002
increase in oil reserves amounted to about 5.4 billion barrels, while natural
gas reserves increased by about 15.2 trillion cubic meters.
104 Refining Industry
CHAPTER THREE
ARAB AND WORLD DEVELOPMENTS IN
PETROLEUM DOWNSTREAM INDUSTRIES
I. REFINING INDUSTRY
World primary distillation capacity increased 1.0% in 2002, rising
about 810,000 b/d from 81.33 million b/d in 2001 to 82.14 million b/d. The
rise was the net result of the reopening of distillation unit number 5 at Mina
al-Ahmadi refinery in Kuwait with a capacity of 120,000 b/d, following the
repair of the fire damage suffered in June 2000, the coming on stream of
two new condensate treatment plants at Messaieed refinery in Qatar with a
combined capacity of 57,000 b/d, an increase in the capacity of the same
refinery’s existing units, bringing it to 80,000 b/d, the closure of ten
refineries with a total capacity of 274,000 b/d in the USA, the updating of
some data, and the improvement and decline in the efficiency of refineries
around the world. North America, the Middle East, and South America
accounted for the biggest increases in capacity, recording rises of 260,000
b/d, 250,000 b/d, and 160,000 b/d, respectively. Africa came fourth with
100,000 b/d, Western Europe next with 80,000 b/d, and then Asia with
20,000 b/d. Eastern Europe and the CIS recorded a decline of 60,000 b/d in
their capacity in 2002 compared with 2001.
Figure (3-1) shows the distribution of world primary distillation
capacity by region in 2002, while Table (3-1) compares the world primary
distillation capacity in 2002 with that in 2001.
Figure 3-1
World Primary Distillation Capacity by Region, 2002
Western
82.1
Middle East Europe
Million b/d
7.9% 17.8%
Asia/Pacific
24.6%
North America
24.7%
South America/ Eastern Africa
Caribbean Europe/CIS 4.1%
8.1% 12.9%
Developments in Downstream Industries 105
Hydrotreating capacity increased about 3.6% in 2002, rising 1.32

million b/d from 37.02 million b/d the previous year to 38.34 million b/d.
The increase was the net result of rises, of varying degrees, in all regions of
the world except Eastern Europe and the CIS, which recorded a decline of
211,000 b/d in their hydrotreating capacity in 2002.
As for catalytic conversion processes, which include fluid catalytic
cracking (FCC), hydrocracking, and catalytic reforming, their capacity
increased 2.2% in 2002, rising about 647,000 b/d from 29.172 million b/d
in 2001 to 29.819 million b/d.
Most of the increase occurred in North America, which accounted for
157,000 b/d, or 24% of the world total, followed by Asia/Pacific with
125,000 b/d, or 19.3%, and Eastern Europe and the CIS with 123,000 b/d,
or 19%. The Middle East came in fourth place with 110,000 b/d, or 17%,
and next came South America with 92,000 b/d, or 14.2%. Africa’s capacity
for these processes in 2002 remained unchanged from 2001.
Table (3-2) shows the breakdown of world catalytic conversion
capacity by region in 2001 and 2002, while Figure (3-2) compares world
catalytic conversion capacity in the various regions in 2002.
Figure 3-2
World Catalytic Conversion Capacity by Region, 2002
Western Europe
Middle East
17.4%
5.3%
Asia/Pacific
18.5%
South America/
Caribbean
6.3%
North America
Eastern
41.7%
Europe/CIS Africa
8.7% 2.0% 29.8
Million b/d
Total catalytic cracking capacity in 2002 was 2.4% higher than in

2001, rising 330,000 b/d from 13.866 million b/d to 14.196 million b/d.
Hydrocracking capacity rose 135,000 b/d, or 3.2%, from 4.302 million b/d
to 4.437 million, catalytic reforming capacity rose 182,000 b/d, or 1.7%,
from 11.004 million b/d to 11.186 million b/d.
As regards thermal conversion processes, such as coking and thermal

cracking processes, their total coke production capacity in 2002 was 10,900
tons/day higher than in 2001. It amounted to 171,700 tons/day, which was
6.8% higher than the previous year’s level of 160,800 tons/day. North
America accounted for most of the increase with a rise of 11,300 tons/day.
Asia came next with an increase of 297 tons/day, followed by the Middle
East with 100 tons/day. In South America coke production declined by 730
tons/day, while in Africa, Eastern Europe and the CIS, and Western Europe
it remained unchanged from 2001. Major developments in the world
refining industry in 2002 are analyzed below by region with those in 2001.
North America
Primary distillation capacity in North America amounted to about
20.29 million b/d in 2002, which was about 260,000 b/d, or 1.3%, higher
than its 2001 level of 20.03 million b/d. Mexico accounted for about
160,000 b/d, or 61.5%, of the total increase, followed by the USA with
60,000 b/d, or 23.1%, and lastly Canada with an increase of 40,000 b/d, or
15.4%. Catalytic conversion capacity, which includes fluid catalytic
cracking, reforming, and hydrocracking, increased by 157,000 b/d, or 1.3%,
from 12.290 million b/d in 2001 to 12.447 million b/d in 2002.
Most of the increase (81,850 b/d) occurred in FCC capacity, of which
83.7%, or 68,530 b/d, was accounted for by the USA. Mexico took an 8.6%
share of the increase (7,000 b/d) and Canada accounted for 7.7%, or 6,330
b/d. Next in line came catalytic reforming capacity, which rose 71,600 b/d.
The USA accounted for 14,300 b/d of this increase and Mexico for 58,300
b/d, while Canada experienced a 950 b/d decline in its capacity from 2001.
Hydrocracking capacity recorded an increase of 3,090 b/d in 2002,
which was the net result of a 4,190-b/d rise in US capacity and declines of
600 b/d and 500 b/d in the capacities of Canada and Mexico, respectively.
The total capacity for hydrotreating processes increased in 2002 by
451,000 b/d, or 3.6%, from 12.556 million b/d in 2001 to 13.007 million
b/d. The rise was the net result of increases in the capacities of the USA
and Mexico by 225,100 b/d and 236,100 b/d, respectively, and a decrease
of 10,000 b/d in Canada’s capacity.
Western Europe
Primary distillation capacity in 2002 rose by 80,000 b/d, or 0.6%,
above its 2001 level, from 14.500 million b/d to about 14.580 million b/d.
The increase may be attributed to the rises of varying degrees in the
operating capacities of some oil refineries in Finland, France, Germany,

Italy, the Netherlands, Spain, and the UK. Total catalytic conversion
capacity rose by 40,000 b/d, or 0.8%, from 5.157 million b/d in 2001 to
5.197 million b/d in 2002. Total hydrotreating process capacity also rose in
2002, by 417,000 b/d, or 5.2%, from 8.090 million b/d to 8.507 million b/d.
The increase in conversion capacity reflects the trend toward

increased consumption of light and middle distillate oil products at the
expense of heavy fuel oil. On the other hand, the increase in hydrotreating
capacity reflects the expanded production of clean fuel in order to meet
strict environmental requirements, such as sulfur-free diesel in some
regions.
Asia/Pacific
Total primary distillation capacity recorded a slight increase of 20,000

b/d, or 0.1%, in 2002, rising from 20.180 million b/d to 20.20 million b/d.
Total catalytic conversion capacity also increased in this region by 125,000
b/d, or 2.3%, from 5.397 million b/d in 2001 to 5.522 million b/d.
The biggest increase (67,000 b/d) occurred in total hydrocracking

capacity, which reflects the trend toward cutting the sulfur content of
middle distillate products. It was followed by FCC capacity (47,000 b/d),
which reflects the growth in demand for high quality gasoline, and lastly
there was an increase of 11,000 b/d in reforming capacity.
Hydrotreating capacity increased 4.3%, rising 337,000 b/d from 7.907

million b/d to 8.244 million, reflecting the trend toward improving the
specifications of all oil products in response to environmental regulations.
Eastern Europe and the CIS

Primary distillation capacity declined in this group in 2002 by 60,000
b/d, or 0.6%. It fell from 10.680 million b/d in 2001 to 10.620 million b/d
owing to the reduced primary distillation capacity of several oil refineries in
Poland and Croatia. Capacity in the remaining countries in this group
remained unchanged from the previous year. Catalytic conversion capacity
increased 123,000 b/d, or 5%, from 2.460 million b/d in 2001 to 2.583
million.
The rise was the net result of increased capacity at refineries in some
countries and reduced capacity at others. In another development,
hydrotreating capacity fell 21,000 b/d, or by 0.5%, in 2002 from 4.082
million b/d to 4.061 million.
South America and the Caribbean

Total primary distillation capacity in this region rose 160,000 b/d, or
2.5%, in 2002, from 6.490 million b/d to about 6.650 million b/d. The
increase resulted from the coming on stream of a new refinery in Peru with
a capacity of 1,700 b/d, and the net result of improved efficiency at some
refineries and reduced efficiency at others. Total catalytic conversion
capacity in this region increased by 92,000 b/d, or 5.1%, in 2002, from
1.793 million b/d the previous year to about 1.885 million. Total
hydrotreating capacity also rose, by 25,000 b/d, or 1.4%, from 1.802
million b/d in 2001 to 1.827 million. All the increases in conversion and
hydrotreating capacities were the net result of increased operating capacity
at some refineries in the region and reduced capacity at others.
Middle East
There was an increase of 250,000 b/d, or 4.0%, in the total primary
distillation capacity of countries in this region in 2002. It rose from 6.210
million b/d to 6.460 million b/d owing to the coming on stream of
distillation unit no. 5 at Mina al-Ahmadi refinery in Kuwait with a capacity
of 120,000 b/d, following the repair of damage caused by the fire that swept
through the refinery in June 2000. In addition, two condensate treatment
units were brought on stream at Messaieed refinery in Qatar, with capacities
of 30,000 b/d and 27,000 b/d, the capacity of existing units was raised by
20,000 b/d to 80,000 b/d, and the efficiency of some refineries in the region
was improved, while the data on others were updated. The capacity for
catalytic conversion processes rose by 110,000 b/d, or 7.5%, from 1.464
million b/d in 2001 to 1.574 million b/d in 2002. FCC capacity accounted
for 60,000 b/d of the total increase, followed by catalytic reforming with
29,000 b/d, and hydrocracking with 21,000 b/d. Hydrotreating capacity rose
by 107,000 b/d, or 6.1%, in 2002, from 1.746 million b/d to 1.853 million
b/d. The increase was due to coming on stream of a new 70,000-b/d unit at
Mina al-Ahmadi refinery in Kuwait for hydrotreating diesel and the
improved efficiency of several similar units at refineries in the region.
Africa
Total primary distillation capacity in Africa rose 100,000 b/d, or by
3.1%, in 2002, to about 3.340 million b/d. The increase was basically the
net result of expanded operating capacity at the Midor refinery in Egypt and
some oil refineries in South Africa and the reduced operating capacity of
some refineries, particularly in Morocco (owing to the fire at Samir
refinery) and Somalia. Total catalytic conversion capacity and
hydrotreating capacity were
2. Arab Developments
Primary distillation capacity in Arab oil refineries rose in 2002 to
7.108 million b/d, which was 260,000 b/d, or 3.8%, higher than the
previous year’s total of 6.848 million b/d. Oil refineries in OAPEC member
countries accounted for all of this increase, owing to the resumed operation
of distillation unit 5 at Mina al-Ahmadi refinery in Kuwait with a capacity
of 120,000 b/d, following the repair of damage caused by the fire that swept
through the refinery in June 2000. Other changes in the primary distillation
of OAPEC countries included the increased operating efficiency of other
distillation units at Mina al-Ahmadi refinery, bringing the refinery back to
its pre-fire capacity of 440,000 b/d, the coming on stream of two
condensate treatment units at Messaieed refinery in Qatar with a combined
capacity of 57,000 b/d, and the expanded capacity of existing units in the
same refinery to 80,000 b/d.
This brought the total primary distillation capacity of oil refineries in
OAPEC member countries in 2002 to 6.432 million b/d, which was 2.3%
higher than the 2001 total of 6.172 million b/d. Total primary distillation
capacity at oil refineries in other Arab countries remained at its 2001 level
of 676,000 b/d.
Figure (3-3) and Table (3-3) show the evolution of primary distillation
capacity at installed oil refineries in the Arab countries between 1998 and
2002.
Figure 3-3
Evolution of Primary Distillation Capacity in the Arab Countries,
1998- 2002
(Million b/d)
7
6
5
4
3
2
1
0
1998 1999 2000 2001 2002

Major developments in the Arab refining industry in 2002 are

reviewed by country below.
Egypt
Within the context of gasoline consumption rationalization, Egypt’s
Council of Ministers agreed in April 2002 to start implementing a new plan
to expand the scheme for converting unleaded gasoline vehicles to natural
gas following a five-year experiment. There are now over 40,000 cars
running on natural gas in Egypt.
The Egyptian Ministry of Petroleum is working hard to complete
several projects currently under way in the Alexandria area and to improve
their performance. They include a reformed naphtha project at the
Alexandria National Refining and Petrochemical Company (Anrepec), at an
investment cost of 1.1 billion Egyptian pounds (EL), a project at the
Alexandria Mineral Oils Company (AMOC) with an investment cost of
EL2 billion, and a project belonging to the Alexandria Specialist Petroleum
Products Company (Aspec) with an investment cost of EL356 million.
Kuwait
Kuwait National Petroleum Company (KNPC) announced in
September 2002 that Mina al-Ahmadi refinery had resumed its former
production level of 440,000 b/d following the re-opening of distillation unit
5 following the repair of damage sustained in the fire of June 2000. This
raised the total capacity of the country’s three refineries to the former level
of 895,000 b/d, of which 200,000 b/d was at Shuaiba refinery, 255,000 b/d
at Mina Abdullah refinery, and 440,000 b/d at Mina al-Ahmadi refinery.
In another development, the South Korean company LG Engineering
and Construction announced in October 2002 that it had won a contract for
developing a unit to separate sulfur from diesel at Mina Abdullah Refinery
that would raise the refinery’s capacity from 66,000 b/d to 84,000 b/d.
Libya
As part of a plan to strengthen cooperation between Egypt and Libya,
the Egyptian-Libyan Supreme Committee decided in May 2002 to set up an
oil and gas company with a capital of $100 million to coordinate the links
between the two countries. In another development, Libya announced its
intention to acquire a share of the Middle East Oil Refining Company
(Midor) following an agreement on the size of the share and necessary
procedures and conditions.
Morocco
It was announced on 26 November 2002 that a fire had ravaged Samir
Refinery, which is owned by the Saudi Corral Oil Group. The refinery had
been closed owing to the floods that occurred in Morocco, since the
refinery was inundated and water seeped into some pipes. It was announced
that perhaps some fuel floating on the water had come into contact with a
heat source and cause the fire. A preliminary report indicated that four fuel
tanks were damaged. The refinery has a capacity of about 139,000 b/d and
meets 80%-90% of Morocco’s oil product requirements. The country’s
second refinery, in the Sidi Kacem region, has a capacity of 26,000 b/d and
meets the remaining needs. Only recently Samir had adopted a plan to
develop the refinery and increase its capacity to about 10 million tons/year
and in May 2001 it concluded a 15-month contract with the UK company
Foster Wheeler to conduct engineering studies for a $600-million program
to develop and update the units at the refinery. Work was due to start in
2002 and end in 2004.
Oman
The Omani government is trying to achieve better conditions for its
purchase of BP’s share of a 285,000-b/d refinery in Singapore. In another
development, the government announced in January 2002 that it was
inviting bids from international companies to build a new 75,000-b/d
refinery in the northern city of Sohar. The deadline for submission of bids
was May 2002.
Qatar
Qatar Petroleum, the French company Total Fina Elf, and the US
Exxon Mobil signed an agreement on 26 November 2002 setting conditions
for the design, construction, and operation of a refinery in Ras Laffan
Industrial City to treat the condensates associated with gas produced from
the North gas field. The initial cost of the first phase to produce and treat
140,000 b/d of condensates is estimated at about $400 million. Scheduled
for completion in 2006, this phase will produce naphtha, kerosene, and
diesel for export.
In early 2002 Qatar completed a large project at Messaieed refinery
that boosted its capacity from 63,000 b/d to 137,000 b/d. The project
involved bringing on stream a 27,000-b/d unit to treat condensates from the
North field and a 30,000-b/d unit to treat condensates from the Dukhan
field, in addition to an FCC unit to convert fuel oil into light products. The
removal of bottlenecks from existing units has boosted their capacity from
63,000 b/d to 80,000 b/d.
Saudi Arabia
In August 2002 Saudi Aramco brought back on stream a unit at its
Yanbu refinery at about 25% of its 46,000-b/d capacity following its
closure in July 2002 due to a mechanical failure. The 375,000-b/d refinery
on the Red Sea is shared equally by Aramco and Exxon Mobil.
Saudi Arabia is continuing to boost the operating efficiency of all its
refineries so as to enhance their profitability. It is pursuing several projects
currently underway, particularly at Rabigh refinery, which is being made
more sophisticated along the lines of Ras Tanura refinery at a cost of $1.3
billion.
It was announced at the beginning of 2002 that Saudi Arabia was
planning to raise the total refining capacity of the oil refineries its owns to 2
million b/d by 2003 and to 2.5 million b/d by 2006 by upgrading and
overhauling its three refineries in Ras Tanura, Riyadh, and Rabigh. The
plan also involves adding units to treat heavy oil and others to recover
sulfur at Riyadh refinery, while at the other two refineries both refining
capacity and condensate treatment capacity are to be increased.
UAE
At the end of June 2002 Abu Dhabi Oil Refining Company ‘Takreer’
signed two contracts worth $480 million in total for the execution of a
project to produce unleaded gasoline and low-sulfur fuel oil. The contracts
were won by the Italian company Technip S.P.A and the US company CBI
Eastern Anstalt and will be executed at the Ruwais refinery complex on a
turnkey basis within a maximum completion time of 36 months from start
date. After completion of the project, the refinery will be able to produce
unleaded gasoline and low-sulfur fuel oil, which will boost the quality of its
products and make them comply with environment protection requirements.
In another development, Takreer stated that the company expected to
increase its production of petroleum condensates to 360,000 b/d in the next
four years following the coming on stream of the third phase of the sour gas
development project and the third phase of the onshore gas development
project, both of which are under way at the major petroleum operations
base at Ruwais in the western part of Abu Dhabi emirate. They will boost
the refinery’s condensate production by 200,000 b/d, from 160,000 b/d to
360,000 b/d, by 2006.
The refinery is currently operating two 140,000-b/d production lines
for treating petroleum condensates. Its products are known for their high
quality.
II. PETROCHEMICAL INDUSTRIES
The profitability of the petrochemical industry declined in 2001 and

2002 owing to the rise in energy prices and the economic recession that the
world experienced during this period. The pressures experienced by the
petrochemical industry during these two years varied from one region to
another.
The rise in prices of natural gas, which is the main feedstock for the
production of olefins in the USA, caused production costs for these
products to rise, thereby reducing the petrochemical industry’s profit
margin. On the other hand, the petrochemical industry in European
countries experienced less pressure since it relies heavily on naphtha as a
feedstock whose prices did not climb as steeply as those of natural gas in
the USA, although they did remain relatively high in Europe owing to the
general rise in crude oil prices.
In Asia the petrochemical industry was badly affected by high naphtha

prices and low demand for petrochemicals, particularly in China. In the
Middle East, where the petrochemical industry relies heavily on natural gas,
whose prices remained stable, petrochemical company profits dropped in
general owing to the slump in the prices of petrochemicals exported to
international markets and the fall in demand.
Ethylene production capacity witnessed significant additions in many

regions in the world in 2002, bringing the total from about 100.6 million
tons in 2001 to about 106.2 million tons in 2002, an increase of 5.5%.
The Middle East accounted for much of the rise with a 24.3% increase
in ethylene capacity, followed by South America with 14.0%, the
Asia/Pacific region with a 10.0% increase, North America with 3.2%, and
Western Europe with a 1.5% rise. Ethylene production capacity in Eastern
Europe and the CIS, and Africa dropped 8.9% and 1.2%, respectively. The
increased ethylene capacity in the Middle East was basically due to the
coming on stream of new projects in Saudi Arabia.
Table (3-4) and Figure (3-4) show the evolution of world installed
ethylene production capacity by region in 2001 and 2002.
114 Petrochemical Industries
Figure 3-4
World Installed Ethylene Capacity, 2002
Asia/Pacific
Middle East
26.4%
8.3% Africa
1.4%
Eastern
Europe/CIS
6.1% North America
32.8%
Western Europe
20.8%
South America
106.2
4.2%
Million tons
Kuwait
The Kuwait Petrochemicals Company (Equate) realized net profits in
2001 of $110 million, which was 40% down on its 2000 profits of about
$183 million. The slump was due to the fall in prices of polyethylene and
ethylene glycol on world markets in the second half of 2001.
The company expects to face difficult times owing to the generally
low prices for petrochemicals on world markets and the rise in energy
prices. Equate owns a petrochemical complex in the industrial area of
Shuaiba consisting of an 800,000-ton/year ethylene unit, a 600,000-ton/year
polyethylene unit, and a 400,000-b/d ethylene glycol unit. The company’s
capital is owned by Kuwait Petrochemical Industries Company (45%), the
US company Dow Chemicals (45%), and Bubiyan Petrochemicals (10%).
Qatar
The recently formed Qatofin company is taking part in the Q-Cem II
project that is under construction at Ras Laffan Industrial City with a
capacity to produce 450,000 tons/year of linear low density polyethylene.
Qatar Petrochemical Company is planning to expand its ethylene
production to 720,000 tons/year after producing about 535,000 tons of the
substance by the end of 2001. Part of this production was used to make
about 382,000 tons of low density polyethylene in 2001, which was 14.6%
more than the previous year. Of this about 375,000 tons was exported, in
addition to about 139,000 tons of ethylene. The company is currently

working on eliminating bottlenecks in its low density polyethylene unit so
as to raise its capacity by about 49,500 tons/year. Q-Chem’s net profits in
2001 totaled about 497 million Qatari riyals (US$136.5 million), which was
17% more than the previous year, despite the sharp slump in the prices of
ethylene and polyethylene on world markets.
Saudi Arabia
The Saudi Basic Industries Company (Sabic), its subsidiaries, and
private sector companies continued to expand existing petrochemical
facilities and build new ones. Projects that came on stream in 2001 included
the Saudi European Petrochemical Company (Ibn Zahr) plant to produce
320,000 tons/year of polypropylene, which brought Ibn Zahr’s production
of this material to 640,000 tons/year. Projects that were started included a
new 600,000-ton/year polyethylene plant at the Petrokemya complex in
Jubail Industrial City and a 30,000-ton/year acetic acid unit at the Ibn
Rushd complex in the Yanbu Industrial Area, using technology developed
by Sabic. Several other expansion and new projects are currently under
way, including:
• A project owned by the Arab Petrochemicals Company (Petrokemya) to
produce 800,000 tons/year of high density polyethylene and linear low
density polyethylene and 60,000 tons/year of polyvinyl chloride.
• A National Petrochemicals Company project in collaboration with
Bassell Company to produce 400,000 tons/year of propylene and
450,000 tons/year of polypropylene.
• A Saudi International Petrochemical Company project in collaboration
with Arab and foreign partners to produce 960,000 tons/year of
methanol, 250,000 tons/year of acetic acid, 50,000 tons/year of ethyl
acetates, and 900,000 tons/year of olefins.
• A United Jubail Petrochemicals Company project in collaboration with
Sabic to produce 1.35 million tons/year of ethylene, 500,000 tons/year
of ethylene oxide, 556,000 tons/year of ethylene glycol, 150,000
tons/year of alpha linear olefins, 450,000 tons/year of polyvinyl
chloride, and 400,000 tons/year of polyethylene.
• A Yanbu Petrochemicals Company (Yanpet) project to produce
535,000 tons/year of polyethylene, 410,000 tons/year of ethylene
glycol, and 800,000 tons/year of ethylene. Yanpet used to produce
260,000 tons/year of polypropylene, but it now produces 1.6 million
tons/year of ethylene, 1.145 million tons/year of polyethylene, and
770,000 tons/year of ethylene glycol.
116 Petrochemical Industries
Sabic announced that in 2002 it had achieved profits on its sales of

various petrochemicals, fertilizers, and mineral products amounting to
2.844 billion Saudi riyals (US$758 million), which was 60% up on its 2001
figures. As part of its international expansion plans, Sabic purchased all
holdings of the Dutch company DSM in a deal worth 2.250 billion euros.
Through its takeover of this company that produces petrochemicals as
well as bio and medical materials, Sabic has become the eleventh biggest
petrochemical company in the world. DSM is a leading petrochemical
company with sales in 2001 totaling about 2.4 billion euros. It markets over
2.6 million tons/year of polymers to Europe, which makes Sabic the third
largest polyethylene producer and the fourth biggest polypropylene
producer in the world.
United Arab Emirates

The petrochemical complex belonging to Abu Dhabi Polymers
Company (Borouge) began commercial production at full capacity in 2002,
managing to export 90% of its production to world markets. Borouge is a
joint venture between Abu Dhabi National Oil Company (Adnoc), which
owns 60% of the shares, and the Danish company Borealis, which owns
40%.
The complex consists of a 600,000-ton/year ethylene unit and two
other units with a combined capacity of 450,000 tons/year of high density
polyethylene and linear low-density polyethylene. In mid-2001 Borouge
and Borealis set up a joint company called Borouge Pte Ltd to market
petrochemicals in Middle Eastern and Asian markets.
III. NATURAL GAS CONSUMPTION, TRADE AND

PROCESSING
1-1 Natural Gas Consumption

World consumption of natural gas continued to rise in 2001, reaching
about 2,405 billion cubic meters, which was 0.3% more than the 2000
figure of about 2,398 billion. Most major regions of the world witnessed
consumption increases of varying proportions except North America, where
it dropped by 4.9% compared with the previous year.
Africa recorded the biggest rise of 6.5% in its natural gas
consumption, followed by Eastern Europe with 5.5%, Asia/Pacific with
4.9%, the Middle East with 4.6%, and Central and South America with
4.4%. The Former Soviet Union countries recorded a slight increase by
0.3%.
Table (3-5) and Figure (3-5) show world natural gas consumption by
region in 2000 and 2001. The share of natural gas in the global energy mix
declined slightly from 24.7% in 2000 to 23.7% in 2001. The share
decreased in most major regions of the world except the Middle East where
it rose from 43.9% in 2000 to 45.7% in 2001. Table (3-6) shows that Latin
America experienced the biggest drop in the share of natural gas in the
energy mix, while other regions recorded declines of varying amounts.
Figure 3-5
World Natural Gas Consumption by Region, 2001
Asia/Pacific Middle East

12.7% 8.4%
Africa
FSU 2.5%
22.8%
North America
Eastern Europe 30.0%
2.5% Latin America
Western Europe
17.1% 4.0%
2405
118 Natural Gas Processing
Table (3-6) and Figure (3-6) show the evolution of the share of natural
gas in the total commercial energy balance in the various regions of the
world in the period 1999-2001.
Figure 3-6
Share of Natural Gas in the World Energy Balance, 1999-2001
(%)
100
24.2 24.7 23.7
80
60
40 75.8 75.3 76.3
20
0
1999 2000 2001
Other Energy Sources Natural Gas
1-2 Natural Gas Trade

The volume of natural gas exports worldwide in 2001 totaled about
554 billion cubic meters, which was about 5.3% higher than the previous
year’s total of about 526 billion cubic meters. This figure covers exports
both via pipeline and as liquefied natural gas.
Countries of the Former Soviet Union (the Russian Federation and
Turkmenistan) led the natural gas exporters in 2001, accounting for about
23.7% of total world exports, followed by North America (particularly
Canada) with about 21.8%, Western Europe with about 21.2%, Asia/Pacific
(particularly Indonesia) with about 13.8%, Africa (in particular Algeria)
with about 12.0%, and finally the Middle East (especially Qatar, Oman, and
the UAE) with about 5.6%.
Most of the exports from North America and Western Europe are
directed to countries in the same region, or interregional exchanges, while
most of the exports from Asia/Pacific and the Middle East are in the form
of LNG.
Table (3-7) shows that the Middle East witnessed the highest growth
in natural gas exports in 2001 over previous years, with a rise of about
32.9% over 2000.
This was attributable to the growth in LNG exports, particularly from
Oman following the commercial start-up of the country’s LNG project, but
also to a lesser extent from Qatar and the UAE.
Gas export volumes also increased from South America by 17.8%,
from North America by 11.3%, and from Western Europe by 9.9%. On the
other hand, exports from the FSU and Asia/Pacific declined 1.4% and
0.7%, respectively. Table (3-7) and Figure (3-7) show the volumes of gas
exported by various regions.
The volume of natural gas exports by pipeline constituted 74.2% of
total exports in 2001, while the remaining 25.8% took the form of LNG, as
Gas exports to world markets from the Arab countries, whether in the
form of LNG or by pipeline, rose in both 2000 and 2001, when they totaled
83.0 billion cubic meters and 89.5 billion, respectively.
Algeria headed the Arab gas exporters with a share of about 64.5% of
total Arab exports in 2001, followed by Qatar with 16.8%, Oman with
8.3%, the UAE with 7.9%, and finally Libya with 0.9%.
Figure 3-7
World Natural Gas Exports by Region, 2001
Asia/Pacific Africa
13.8% 12.0%
Middle East
5.6%
North America
21.8%
FSU
23.6%
Latin America
Western Europe 2.0%
21.2%
554.3
Figure 3-8
World Natural Gas Exports, 2000 and 2001
(%)
100
26.02 25.80
80
60
40 73.98 74.21
20
0
2000 2001
by Piepline as LNG
Algeria exports a large proportion of its gas via pipeline eastwards to

Italy and westwards to Spain. Table (3-9) shows the evolution of Arab
natural gas exports in the period 1997-2001, while Figure (3-9) shows the
share of some Arab countries in LNG exports in 2001.
Figure 3-9
Arab Natural Gas Exports by Country, 2001
(%)
Qatar UAE
18.5% 7.9% Oman
8.3%
Libya
0.9%
Algeria
89.5 64.5%
1-3 World Natural Gas Prices

Natural gas prices in general, both for pipeline gas and LNG,
fluctuated on major markets in 2001. LNG reaching Japan dropped about
1.7% of its price in 2001 compared with 2000, while gas on EU markets
gained about 29% in price, and gas reaching the USA fell by about 3.8%, as
Most of the natural gas exported to EU countries is transported by
pipeline, whether it be from the Russian Federation, Turkmenistan, Algeria,
or other European countries like Denmark and Norway. Algeria, Libya,
Nigeria, Qatar, and Oman also export LNG, some of them as spot cargos.
Figure 3-10
Average World Prices of Natural Gas, 1997-2001
(US$ per million BTU)
1
1997 1998 1999 2000 2001
Japan European Union USA
Algeria
The Algerian national oil company Sonatrach signed two letters of
intent to export Algerian natural gas, the first to the Spanish company
Cepsa and the second to the French company TotalFinaElf, which owns
45.3% of the shares in Cepsa. The two agreements call for the supply of a
billion cubic meters per annum of Algerian gas to the two companies once
the Medgaz pipeline is completed, linking Algeria to Spain directly across
the Mediterranean.
The Medgaz pipeline currently under study is a joint project between

Sonatrach (20%), Cepsa (20%), BP (12%), Endessa (12%), the Italian ENI
(12%), Gaz de France (12%), and TotalFinaElf (12%).
As part of its efforts to develop new markets for its LNG, Algeria
agreed with the USA to study ways of expanding US imports of Algerian
LNG in coming years by examining the growing natural gas requirements
of the USA compared with Algeria’s reserves.
Algeria is hoping to become the biggest supplier of natural gas to US
markets. The only obstacle remaining is the US shortage of reception and
regasification facilities.
Egypt
BP, Italy’s ENI, and the Egyptian General Petroleum Corporation
concluded a deal in 2001 to build a 4.5 billion cubic meter/year LNG
complex at Damietta.
The Spanish company Union Fenosa Gas had earlier struck a 25-year
deal with the Egyptian Natural Gas Company (Gasco) according to which
the Egyptian company would supply the Spanish company with at least 4
billion cubic meters of Egyptian natural gas per annum, with a provision
allowing an extension for another 25 years. A 7-million ton/year natural gas
complex is already under construction at Damietta.
By the end of 2002 80% of the construction work had been concluded
on the Arabian gas pipeline project linking al-Arish in Egypt with the
Jordanian city of Aqaba. This was the first phase of the project that will
subsequently be extended to Syria and Lebanon. The first phase, which is
estimated to cost about $220 million, has been financed with $70 million of
Egyptian local currency and loans from various sources, including $100
million from the Arab Fund for Economic and Social Development. The
project will supply Aqaba power station with about 1 billion cubic meters a
year of Egyptian gas.
Kuwait
The project for supplying Kuwait with Qatari natural gas is still
awaiting approval from the states through which the pipeline will pass.
Once completed, at an estimated cost of about $1 billion, it will supply
Kuwait with between 750 million and 1400 million cubic feet/day of Qatari
gas via a 570-km pipeline of 42/48 inch diameter laid under the Arabian
Gulf, linking Ras Laffan in Qatar with Ras ez-Zor in Kuwait.
Kuwait Petroleum Corporation reached an agreement with Qatar

Petroleum on the means of financing the project, which will last seven
years. Accordingly, 40% of the cost will be paid cash, with the remainder
being covered by KPC oil sales. Converting Kuwait’s power stations and
desalination plants to natural gas will save over 180,000 b/d of oil and oil
products.
Kuwait has announced that it will continue negotiating with Iran for
the purchase of quantities of natural gas, in addition to the quantities that
will be produced from the offshore Durra field, which is located in the
waters of the shared zone between Kuwait and Saudi Arabia. The Joint
Petroleum Operations Company, which is jointly owned by Kuwait and
Saudi Arabia, is currently developing the shared Durra field.
Oman
Oman LNG Company signed a contract with the US-Japanese
consortium Chiyoda Foster Wheeler for the construction of a third train at
the LNG complex owned by the Omani company, boosting its capacity
from 6.6 million tons/year to 9.9 million tons/year. Half the production will
be exported to the Spanish company Union Fenosa Gas.
Oman is currently negotiating a bank loan to finance the purchase of
four LNG carriers relating to four contracts that Oman LNG Company
concluded with the Korean Gas Company, the Japanese company Osaka
Gas, the Indian company Daphol Electricity, and Shell Western E&P Inc. to
supply LNG. The company is currently selling part of its production on
short term contracts. In 2002 Oman LNG Company supplied Gaz de France
with a cargo of 139,000 cubic meters as part of a contract concluded
between the two companies to export gas to France in future.
Qatar
Qatar Petroleum and Sasol International of South Africa entrusted a
group of 15 international banks to secure a $700 million loan to finance an
oil distillates project that the two companies intend to build in Ras Laffan
Industrial City. The joint project between Qatar Petroleum (51%) and Sasol
(49%) is already being developed and is expected to start production at the
end of 2005. In the first phase about 33 million cubic feet per day of natural
gas will be treated to produce 33,000 b/d of liquid products, of which
24,000 b/d will be gasoil, 8,000 b/d naphtha, and 1,000 b/d of LPG.
Foster Wheeler Energy Ltd has been retained to prepare the front end
Engineering. Bids are currently being assessed for the construction of the
plant the supply provision of the necessary equipment.
Qatar is planning to develop several projects to convert natural gas

into liquid distillates in addition to the aforementioned venture, with the
aim of installing the capacity to convert between 4 to 5 billion cubic
meters/day of natural gas into 400,000-500,000 b/d of liquid distillates.
The projects it plans to set up in collaboration with foreign partners
are as follows:
• A 140,000-b/d joint project with Royal Dutch/Shell
• A 115,000-b/d joint project with ExxonMobil
• A 185,000-b/d joint project with the Canadian company Ivanhoe
• A joint project with a capacity of between 50,000 and 300,000 b/d with
Conoco
• An 80,000 b/d joint project with Marathon
In another development, the French company Coflexip Technip won a
contract to prepare the front end Engineering for a plant to produce 550
million cubic feet per day of helium. Helium is separated from natural gas,
which contains small proportions of this gas. A contract for the construction
of the plant and supply of equipment is expected to be signed in the first
quarter of 2004.
In a bid to secure additional LNG markets, the Qatari company
RasGas reached an agreement with Petronet LNG Ltd of India in the
summer of 2002 on the method of pricing the Qatari LNG that will be
exported to India, following protracted negotiations that lasted about a year.
The agreement sets higher and lower limits for the price of a barrel of oil
(between $14 and $16), on which the price of the LNG will be based.
This arrangement is designed to protect the natural gas price from the
fluctuations that affect oil prices on the international market. An earlier
contract between RasGas and Petronet calls for the exportation of 5 million
tons/year of Qatari LNG to the India port of Dahej on the basis of an
average oil price of $18 per barrel.
Qatar Petroleum is planning to expand its LNG capacity by adding
new facilities and raising the capacity of existing ones by removing
bottlenecks. The capacity of existing projects at the end of 2002 totaled
about 14 million tons/year. This is expected to rise to 14.7 million tons/year
in 2003, to 17.3 million in 2004, and finally to about 24.9 million tons/year
in 2005. In a related development, RasGas announced in 2002 that it had
signed a contract for building a fourth train with a capacity of 4.7 million
tons/year at its existing complex in Ras Laffan Industrial City.
Moreover, TotalFinaElf is planning to add one or two 5-million

ton/year train at the Qatargas complex also in Ras Laffan. Qatar Maritime
Transport Company has concluded an agreement according to which it
assumes control of 25% of the shares of the LNG carrier that a Japanese
consortium led by Mitsui OSK Lines is building to carry LNG produced at
the RasGas complex.
Qatar Maritime Transport Company is currently focusing its business
on the transport of LNG and LPG. In April 2002 it commissioned STX
Shipbuilding Company in South Korea to build an LPG carrier for delivery
in 2004. Another contract with the same company is for a second 23,000-
cubic meter LPG carrier that is expected to be delivered at the end of 2004.
Qatar Maritime Transport Company took delivery of the first of three
refined and chemical product vessels that it has commissioned. The first has
a capacity of 37,000 dead weight tons and the other two are due to be
delivered in March and June 2003.
Saudi Arabia
The natural gas separation and treatment unit at Haradh started
commercial production in 2002. It treats natural gas in order to supply the
main gas network with about 1.5 billion cubic feet/day of dry gas, in
addition to producing gas liquids.
Tables 129
TABLES OF CHAPTER THREE-PART ONE
Table 3-1
World Installed Refining Capacity by Region,
2001 and 2002
(Million b/d)
(%)
2001 2002 Change
2002/2001
North America 20.03 20.29 1.30
Asia/Pacific 20.18 20.20 0.10
Western Europe 14.50 14.58 0.55
Eastern Europe/CIS 10.68 10.62 (0.56)
South America/Caribbean 6.49 6.65 2.47
Middle East 6.21 6.46 4.03
Africa 3.24 3.34 3.09

Total 81.33 82.14 1.00
Sources:
- OAPEC Data Bank.
- Oil & Gas Journal, 24 Dec. 2001 & 23 Dec. 2002.
130 Tables
Table 3-2
World Catalytic Conversion Capacity by Region*,
2001 and 2002
(Thousand b/d)
(%)
2001 2002 Change
2002/2001
North America 12290 12447 1.28
Asia/Pacific 5397 5522 2.32
Western Europe 5157 5197 0.78
Eastern Europe/CIS 2460 2583 5.00
South America/Caribbean 1793 1885 5.13

Middle East 1464 1574 7.51
Africa 611 611 0.00
Total 29172 29819 2.22
* Includes catalytic cracking, hydrocracking and catalytic reforming.
Sources:
- OAPEC Data Bank.
- Oil & Gas Journal, 24 Dec. 2001 & 23 Dec. 2002.
Tables 131
Table 3-3
Installed Refining Capacity in the Arab Countries,
(Thousand b/d)
Number of
1998 1999 2000 2001 2002
Refineries
Algeria 5 513 513 513 513 513
Bahrain 1 265 265 265 265 265
Egypt 9 673 719 819 819 819
Iraq 12 550 550 570 570 570
Kuwait 3 854 901 736 652 895
Libya 5 380 380 380 380 380
Qatar 2 63 63 63 120 137
Saudi Arabia 8 1795 1795 1795 1795 1795
Syria 2 245 245 245 245 245
Tunisia 1 35 35 35 35 35
UAE 5 282 282 703 778 778
Total OAPEC 53 5655 5748 6124 6172 6432
Jordan 1 84 103 103 103 103
Lebanon 2 * * * * *
Mauritania 1 25 25 25 25 25
Morocco 2 165 165 165 165 165
Oman 1 80 80 80 80 80
Somalia 1 10 10 10 10 10
Sudan 5 37 43 93 93 93
Yemen 2 200 200 200 200 200
Total other Arab 15 601 626 676 676 676
Total Arab countries 68 6256 6374 6800 6848 7108
* The two refineries were shutdown after they sustained serious damage during the civil war.
Source:
- OAPEC Data Bank.
132 Tables
Table 3-4
World Ethylene Capacity by Region,
2000 and 2001
(Thousand tons/year)
(%)
2001 2002 Change
2002/2001
North America 33742 34813 3.2
Asia/Pacific 25504 28055 10.0
Western Europe 21788 22113 1.5
Eastern Europe/CIS 7065 6436 (8.9)

Middle East 7054 8770 24.3
South America 3918 4468 14.0
Africa 1528 1510 (1.2)
Total 100599 106165 5.5
Source:
- Chemical & Engineering News,Vol. 80, No 11, March 18 , 2002.
- Oil & Gas Journal, 23 April. 2001.
Tables 133
Table 3-5
2000 and 2001
(Billion cubic meters)
(%)
2000 2001 Change
2000/99
North America 759.5 722.5 (4.9)
FSU 547.0 548.6 0.3
Asia/Pacific 290.8 305.1 4.9
Middle East 192.7 201.5 4.6
Latin America 92.9 97.0 4.4

Eastern Europe 56.6 59.7 5.5
Africa 56.5 60.2 6.5
Total 2398.2 2404.8 0.3
Source:
134 Tables
Table 3-6
Share of Natural Gas in the Total Consumption of Commercial Energy by
Region,
1999 - 2001
(%)
1999 2000 2001
FSU 53.3 53.8 52.0

Middle East 42.8 43.9 45.7
North America 25.6 26.2 24.6
Europe 22.2 22.7 22.3

Africa 17.9 19.6 19.3
Asia/Pacific 10.5 11.1 10.9
Total 24.2 24.7 23.7
Source:
- bp Statistical Review of World Energy, June 2001 & June 2002.
Tables 135
Table 3-7
Natural Gas Exports by Region,
(%)
2000 2001 Change
2001/2000
Of which: Norway 49.00 50.50 3.1
Netherlands 36.62 42.20 15.2
UK 13.11 15.78 20.4
FSU 132.98 131.06 (1.4)
Of which: Russia 130.33 126.86 (2.7)
Turkmenistan 2.65 4.20 58.5
North America 108.37 120.61 11.3
Canada 101.66 100.02 (1.6)
Mexico 0.17 0.65 282.4
USA 6.54 10.94 67.3
Asia/Pacific 77.13 76.57 (0.7)
Of which: Australia 10.11 10.20 0.9
Brunei 8.79 - -
Indonesia 35.70 32.80 (8.1)
Malaysia 22.53 21.81 (3.2)
Mynamar - 1.75 -
Africa 68.05 66.29 (2.6)
Of which: Algeria 61.64 57.69 (6.4)
Libya 0.80 0.77 (3.8)
Nigeria 5.61 7.83 39.6
Middle East 23.44 31.16 32.9
Of which: Oman 2.47 7.43 200.8
Iran - 0.11 -
Qatar 14.04 16.54 17.8
UAE 6.93 7.08 2.2
Of which: Argentina 4.20 5.17 23.1
Bolivia 1.90 2.50 31.6
Trinidad & Tobago 3.51 3.65 4.0
Total 526.27 554.27 5.3
Source:
136 Tables
Table 3-8
World Natural Gas Exports by Region,
2000 and 2001
2000 (%) 2001 (%)
A- Exports by Pipeline.
FSU 132.98 34.2 131.06 31.9
North America 106.72 27.4 118.82 28.9
Europe 106.69 27.4 117.26 28.5
Africa 35.32 9.1 32.15 7.8
Latin America 6.10 1.6 7.67 1.9

Asia/Pacific 1.50 0.4 4.25 1.0
Middle East - - 0.11 0.0
Total World Exports by Pipeline 389.31 100.0 411.32 100.0
B- Exports as LNG.
FSU - - - -
North America 1.65 1.2 1.79 1.3
Europe - - - -
Africa 32.73 23.9 34.14 23.9
Latin America 3.51 2.6 3.65 2.6

Asia/Pacific 23.44 17.1 72.32 50.6
Middle East 75.63 55.2 31.05 21.7
Total World Exports as LNG 136.96 100.0 142.95 100.0
Total World Exports 526.27 554.27
Exports by Pipeline/ Total Exports (%) 73.98 74.21
Exports as LNG/ Total Exports (%) 26.02 25.79
Source:
Tables 137
Table 3-9
Natural Gas Exports in Arab Countries
1997 - 2001
(Million cubic meters)
1997 1998 1999 2000 2001
Algeria* 48740 52690 59320 61693 57690

Qatar 2860 4790 8100 14040 16540
Oman - - - - 7430
UAE 7310 6720 7070 6510 7080
Libya 1120 910 960 800 770
Total 60030 65110 75450 83043 89510
* Total Exports, both by Pipeline and as LNG.

Source:
- Cedigaz. Natural Gas in the World, 2001 Survey.
138 Tables
Table 3-10
World Natural Gas Prices,*
1997 and 2001
(Dollar/Million BTU)
(%)
1997 1998 1999 2000 2001 Change
2001/2000
Japan** 3.91 3.05 3.14 4.72 4.64 (1.7)
European Union 2.50 2.26 1.80 3.25 4.19 28.9
USA 2.53 2.08 2.27 4.23 4.07 (3.8)
* Average CIF Prices.

** LNG Prices
Source:
PART TWO
OAPEC ACTIVITIES IN 2002
CHAPTER ONE
THE MINISTERIAL COUNCIL AND
THE EXECUTIVE BUREAU
I. THE MINISTERIAL COUNCIL
The Ministerial Council conveyed its sixty-eighth meeting in Cairo,

Egypt, on 10 June 2002. The meeting was at the level of ministerial
representatives. It was chaired by H.E. Mohamed Mezian, the Executive
Bureau Representative of Algeria, which held the chairmanship for the year
2002. The Council held its sixty-ninth meeting in Cairo on 21 December
2002, under the chairmanship of H.E. Chakib Khelil, Algeria’s Minister of
Energy and Minerals.
The decisions adopted by the Ministerial Council this year are
included in the press releases issued after the two meetings, and are
appended to this Report.
II. THE EXECUTIVE BUREAU
The Executive Bureau held its hundred and second meeting in Cairo,
Egypt, on 8-9 June 2002, to prepare the agenda of the sixty-eighth
Ministerial Council meeting. It held its hundred and third meeting in Cairo
on 12-13 October 2002, to consider the 2003 budgets for the General
Secretariat and the Judicial Tribunal and to submit recommendations to the
sixty-ninth meeting of the Ministerial Council.
The Bureau also held its hundred and fourth meeting in Cairo on
18-19 December 2002, to draw up the agenda for the sixty-ninth meeting
of the Ministerial Council.
141
142 General Secretariat
CHAPTER TWO
THE GENERAL SECRETARIAT

The General Secretariat continued to carry out its functions based on
the outlines drawn up by the Ministerial Council as part of the
Organization’s Program of Work, which falls into the following categories:
• Developing the Data Bank.
• Enhancing Arab and international cooperation in energy-related issues,
particularly through the Arab Energy Conference.
• Enhancing OAPEC-sponsored ventures.
• Encouraging scientific research.
I. THE DATA BANK AND RELATED ACTIVITIES
1. OAPEC Data Bank

The General Secretariat’s efforts related to the Data Bank in 2002
included the following activities:
1-1 Follow up the Data Base Developments

The General Secretariat continued to follow up, update, and review
the data acquired from OAPEC member countries and other Arab countries,
using particularly the regional papers presented to the Seventh Energy
Conference, which was held in Cairo during 11-14 May 2002, and the
statistical and technical publications issued by Arab and international
organizations and oil companies. The General Secretariat spent much time
and effort collecting this data and information in order to allow the Data
Bank realize its objectives which are namely; achieving credibility,
accuracy and presenting a variety of statistical data needed by member
countries, researchers, and those in dealing with energy matters in the Arab
world and elsewhere.
1-2 Managing the Local Area Network (LAN) and Providing Technical
Support for the used Hardware and Software
The General Secretariat has been keen to follow up technological
developments related to local network, computers, and related equipment,
so as to provide the best possible protection for its data-base and to improve
Data Bank and Related Activities 143
the efficiency of the maintenance work and the internal supervision of

the network and the exchange of data among users. It has sought to upgrade
its hardware in order to make it compatible with the latest software needed
to perform the General Secretariat’s functions efficiently.
1-3 Contribution of The Data Bank in issuing Publications and CD-

RoMs
The collaboration of the Data Bank in preparing and issuing OAPEC
publications included:
First: Designing and preparing the statistical tables and graphs both in
Arabic and English for the Secretary General Twenty-eighth
Annual Report, 2001, in addition to providing the report as a
CD-Rom and on OAPEC Website on the internet.
Second: Preparing a booklet entitled “Technical and Economic Indicators
of Energy” which was distributed during the Seventh Arab Energy
Conference. This booklet consists of a number of general
indicators as well as technical and economic indicators related to
energy in the Arab world and elsewhere.
Third: Designing, compiling, and producing the 2002 Annual Statistical
Report which covers the period 1996-2001. The report is made up
of four main sections:
Section I: Contains data on member countries and other Arab countries

relating to exploration, production and refining activities, oil
and natural gas trade and processing, consumption of energy,
statistics on domestic prices of energy products in local
currency and US dollars, data on transport of oil and gas,
pipelines, electricity and selected economic indicators.
Section II: Contains data on reserves, production, refining and
consumption of oil and energy, trade of oil and gas, in the
Arab countries and elsewhere. It also reviews the oil and
energy prices in international markets.
Section III: Contains data and selected indicators in OECD countries,
Asia and the Pacific.
Section IV: Listing of the sources from which the data was collected as
well as definitions and conversion factors and symbols. Much
of the data in the Report was collected from the country
papers presented to the Seventh Arab Energy Conference.
The Data Bank also added the latter Report to the General
Secretariat’s website and placed the electronic version of the Report on
CD-Rom to present the data and information in a simple manner for PC
users.
Fourth: The General Secretariat continued to download and reorganize
energy data on international groups, which it publishes in a
booklet entitled “Energy Data for International Groups.” It
rearranges and reclassifies the “BP Statistical Review of World
Energy 2001,” after converting all of its units to thousand
barrels of oil equivalent/day and adding graphs to it. The data
covers energy of international groups as well as individual
countries starting from 1965 up to 2001. The General
Secretariat also produced a CD containing this data. The
distribution of this publication is very limited.
Fifth: The Data Bank compiled and produced a CD-ROM with the
papers presented to the Seventh Arab Energy Conference, the
deliberations of the participants in the discussion sessions, the
addresses of the opening and closing sessions, the addresses of
the heads of delegations, the conference program, the final
communiqué, and the names of participants.
Sixth: The Data Bank produced a CD-ROM containing papers and
abstracts presented to the Future of Natural Gas seminar, which
was jointly held by OAPEC, Cedigaz and l’institut Français du
Pétrole (IFP), in Paris during 25-27 June 2002 at the latter’s
headquarters near Paris, a number of presentation which were
presented by the lecturers, the seminar’s program, the opening
session and names of participants.
Seventh: The Data Bank created a CD-ROM containing the proceedings
of the Second Meeting of the Working Group to Explore
Opportunities of Cooperation in The Exploration of Natural
Gas.
1-4 Updating OAPEC Website

The General Secretariat continually updates its internet website at
www.oapecorg.org. The following is updated regularly:
• An outline on the General Secretariat and the seminars and meetings it
organizes.
• The Editorials of OPAEC’s Monthly Bulletin, as well as the Activities
of the General Secretariat.
• The abstracts of articles published in the “Oil and Arab Cooperation”

journal.
In addition, the following is added and regularly updated on OAPEC
website:
• The program and papers of the Seventh Arab Energy Conference prior
to its compilation, in an attempt to encourage discussions among
participants. It was later replaced with a hard copy of the proceedings.
• The Secretary General’s Twenty-eighth Annual Report in both Arabic
and English as well as the Annual Statistical Report 2002.
• A list of names and addresses of some Arab companies operating in the
oil industry and which qualified to carry out projects outside their
countries. This information was provided to the General Secretariat by
some member countries as a result of the recommendations of the First
Meeting of the Working Group to explore opportunities of cooperation
in the exploration of natural gas.
1-5 Other Activities

The Data Bank assisted the General Secretariat departments
throughout the year in the preparation of studies and technical papers which
were presented to the Seventh Arab Energy Conference, international and
Arab conferences and meetings.
2. Information and Library Services
2-1 Information and Documentation

The General Secretariat’s Library is an oil-integrated library
possessing valuable specialized books and references in the oil field, and a
wide selection of energy, economy and trade topics.
The Library provides services to OAPEC researchers and the Data
Bank by furnishing them with different references. It also assists
researchers outside the General Secretariat, and constantly cooperates with
other libraries such as the Arab Fund for Economic and Social
Development and the Kuwait Institute for Scientific Research.
This year, the Library received 200 visitors who had benefited from
its services, among those were university professors and researchers and
students. The Library continued to expand its bibliographical database
which was formed in 1998, using the computerized documentation services
(CDS) in entering new data collected from Arabic and foreign-language
books, documents, periodicals, and journal articles. A total of 7,027

references have been entered in Arabic and English.
The Library provides a data retrieval and inquiry service to
researchers, in addition to the usual documentation services, which include:
• Compiling a bibliography for the quarterly journal “Oil and Arab
Cooperation”.
• Compiling the section “New Books in OAPEC Library” which appears
in OAPEC Monthly Bulletin.
In addition a quarterly list of books and journal articles recently
acquired by the Library is issued and distributed to the relevant
departments.
2-2 Indexing and Classification

The Library continues to provide technical services in the form of
indexing and classification. The number of books indexed and classified
rose from 27,150 to 27,436, and documents from 5,360 to 5,369.
2-3 Acquisition Services

The Library’s acquisition services this year focused on the following:
• Acquiring new books based on the recommendations of the Secretary
General’s office and departments.
• Renewing OAPEC’s subscriptions to the important Arab and non-Arab
periodicals for the year 2002.
• Monitoring the official publications of various bodies, government
circles, institutions and oil companies.
• Monitoring the arrival of some periodicals at various websites and
downloading them on the General Secretariat’s internal network.
2-4 General Services

The Library provides the following services:
• Lending service: the monthly average lending process to the General
Secretariat’s staff reaches 100-120 periodicals and books.
• Binding services: 270 books.
• Issuing a fortnightly file containing the contents pages of the latest
periodicals and books for the use of the staff of the General Secretariat.
• Responding to various queries and providing express photocopying
services.
3. Studies, Papers, and Reports
3-1 Forecast of Energy Consumption in the Arab Countries
Energy systems in the Arab countries are characterized by the rise in

local consumption, the scarcity of non-oil resources, and the practically
complete dependence on oil, and the increasing share of natural gas share in
the energy mix. When monitoring the historical development in various
energy resources consumption during the last three decades, we observe
growing consumption rates in the seventies, followed by moderate rates in
the nineties.
This growth is attributable to the substantial progress which transpired
to the major factors determining consumption namely; the economic
growth, over population, stability of the local energy prices and keeping
them lower than the international prices.
In light of the historical developments of the energy consumption in
the Arab countries and the growth rates and the determining factors of
consumption, the prospective consumption levels were outlined in terms of
total energy, oil and natural gas products up to 2015. Future prospects are
based on the relationship between energy consumption on one hand and
variables affecting it, e.g. economic growth, population growth and energy
prices on the other hand.
The study comprises two sections; the first reviews the mode and
trends of energy consumption in the Arab countries, in addition to the
factors determining consumption. The second deals with the energy
consumption prospects in the Arab countries up to 2015. The study
reviewed the consumption rates and analyzed the relation between energy
consumption and the future variables. It also presented the prospects of
energy consumption in the regional groups and in each country.
In conclusion, the study predicted continuous growth in the
consumption of energy resources in the Arab countries with a 2.4% rate per
year up to 2015, i.e. the growth rate of oil products will eventually reach
1.4% per year. However, the average annual natural gas consumption
growth rate, within the next 15 years, will reach 3.3%.
The natural gas share is expected to rise at the expense of oil, with
both shares reaching 95% of the total energy resources consumption. The
study called for maintaining moderate energy consumption growth rates by
meeting the increasing needs of the Arab consumers and avoiding over
consumption in accordance with the prevailing conservation policies. It also
reiterated the need to continue utilizing the available natural gas

resources which some Arab countries enjoy, and look into the possibility of
directing the surpluses to other Arab countries by means of establishing
inter-connecting projects amongst them, if they prove to be economically
and technically feasible.
3-2 Arab Cooperation in the Field of Natural Gas and Oil

The paper referred to the emergence of factors which encourage the
Arab natural gas and oil cooperation such as the active role of the Greater
Arab Free Trade Area, the economic activities in general and the electric
grids in particular, the growing importance of natural gas as a foundation
for industry and socioeconomic development, as it is used as a fuel
characterized by having a minor polluting repercussions and low costs in
terms of local and regional consumption.
In the past few years, the conditions were conducive to encourage the
establishment of natural gas interconnection projects namely linking Egypt
with Jordan, Syria and Lebanon on one side and Libya on other side. There
is also cooperation amongst the Gulf countries and Morocco, Algeria and
Tunisia.
With regard to oil, the role played by OAPEC sponsored companies as
well as Sumed oil pipeline enhanced the Arab oil cooperation efforts, as
well as promoting inter-Arab cooperation through bilateral agreements as in
the case of Iraq and Jordan, and Saudi Arabia and Bahrain. Recently, the
Arab trade financing programs contributed in enhancing oil trade. Further
support should be given to the greater participation of the private sector in
the oil and natural gas trade activities, as this sector proved efficient in
accelerating the Greater Arab Free Trade Area to achieve its objectives.
3-3 Future and Economics of Alternative Transport Fuels

This report focused on the advantages in encouraging the utilization of
alternative transport fuels, particularly those relating to clean air efforts on
Arab and international levels. These alternatives consist of fuel refined
products of natural gas in the form of liquefied oil gas, compressed natural
gas, products produced from gas as well as the agricultural fuel (ethanol)
which is extracted from corn and sugar cane. In addition electricity could
be used as a fuel for vehicles.
The report referred to the common characteristics of these alternatives
particularly its dependence on government aid, which is vital for its
utilization. This is demonstrated in the cases of the USA and Brazil, where
farmers obtained high subsidies rates in return for their production of

sugar cane and corn. The second common characteristic for alternatives is
its participation in reducing pollution caused by vehicles. Therefore, the
efforts aimed at utilizing alternatives one primarily accompanied by air
cleaning campaigns in the over populated areas of industrial and developing
countries. The third common characteristic is the huge propaganda
surrounding it, which indicates that its share in the market is far greater than
in reality.
The report tackled the economic and environmental aspects of
alternative fuels compared to the marketing advantages of gasoline and
diesel and their widespread usage for more than a century. This set
conditions for two characteristics to emerge namely; providing the infra
structure for the fuel supply stations, and the continuous progress in
reducing pollution rates resulting from the use of gasoline and diesel. In
addition the continuous decline in the cost of refined oil-products gave the
gasoline and diesel an advantage that fuel alternatives could not compete
with. Hence, the competitive position of refined oil products are in
continuous improvement due to the high cost of the alternatives and the
difficulty in providing their infra structure in both developing and industrial
countries.
3-4 Out look of World Oil Demand Until 2010 and their Impact on the
Production of Member Countries
This report is of great importance to the member countries as their
socioeconomic development is closely linked to the prospective
developments in the world oil demand levels. The report reviews the
situation up to 2010, factors controlling consumption, and the main features
for its development since 1985. The report also reviewed the efforts of the
oil countries to keep abreast with the latest developments in international
oil markets, and measures adopted for its stability in order to maintain
prices within the previously set band ($22-$28/OPEC barrel) which gained
consensus of the various members of the oil market.
The report focused on the following main issues:
1- The development of oil consumption and supplies, 1985-2001.
2- The world economic performance, as well as the demand and supply
until 2003.
3- Out look of oil consumption and supply up to 2010.
4- Oil production in some member countries until 2010.
5- Probable repercussions on the member countries.
The majority of the forecasts in the report were based on specific

assumptions in which OPEC and the American Energy Information Agency
relied upon. These assumptions are related to the prospective interaction
between a number of factors which include; economic, population and
demand growth rates during the previous years, in addition to the price
levels.
The estimates refer to the prospective growth in demand to about
77.7-77.3 million b/d in 2003, and a prospective growth in oil demand to
around 1.6% during 2000-2010 from 76 million b/d to 89.6 million b/d, or
an additional world consumption of 13.6 million b/d. It is expected that the
member countries will have immense contribution in supplying these
prospective oil demand increases, as in 1985. This is attributable to the
huge oil reserves they hold which are of relatively low cost as well that
their location is close to the surface, and due to their vicinity to the
emerging markets of Asia.
3-5 Natural Gas Grids among Arab Countries

This study was presented to the Economic and Social Commission for
Western Asia (ESCWA) Conference which was held in Beirut, during
15–17 October 2002 on “ Capacity Building and Regional Integration for
Developing a Sustainable Energy Sector in ESCWA Countries”. It
explained that the gas inter-connection grids among Arab countries
benefited from the development of the basic infrastructure of the
hydrocarbon products, particularly gas pipelines from their production
location to the consumers in the local markets.
Gas grids represent an advanced stage of the Arab countries efforts to
utilize their gas resources to boost socioeconomic development and assist in
sustainable development of their economic activities. These efforts have
become more visible in last three decades where the gas consumption grew
at the rate of 11% per year, compared to half that rate of oil consumption in
the local markets.
The role of natural gas intensified due to the following factors:
• The upsurge in its economic value prior to the modification of the oil
prices in international markets.
• reducing associated gas which is flared to 6% only in 2000 compared to
89% in 1970, by utilizing it to generate electricity and then setting-up
projects to use it as a feedstock, in addition to the amount of gas which is
re-injected in the oil fields.
• The combined cycle has continued to increase the demand for natural gas
in Arab countries where the rate of electricity energy utilization rises by
10% per year. Thus, the prospective gas consumption rates increased in
the countries which do not possess gas resources in addition to natural
gas exporting countries.
• The gas producing countries witnessed an upsurge in the exporting
capacity from 7.3 trillion cubic meters at the end of 1999 to 19.8 trillion
cubic meters at the end of 2001. These amounts will increase to 30
trillion cubic meters if we consider Qatar’s recently explored reserves
which were announced in May 2002.
• The Arab country’s’ rich experience in the field of electricity inter-
connections, and the development of the GAFTA increased the incentive
of expansion in the field of natural gas cooperation.
3-6 A study on the “UN Framework Convention on Climate Change

UNFCCC: historical background and developments”
The study reviewed the historical background, the latest updates on

the convention the ensuing negotiations and meetings, and the resulting
decisions until mid 2002. The study presented a brief historical summary
of the climate change theory and the green house effects phenomenon and
defined the green house gases. It went on to reviewing the deliberations
which resulted in approving the convention agreement in 1992. It also
reviewed the sessions and results of The Conferences of the Parties (COP)
starting with the First Session in 1995 until the Seventh Session in 2001.
The main outcome of these sessions was the adoption of the Kyoto
Protocol (during the Third Session of the Conference of the Parties in 1997)
which stipulated that the industrial countries should reduce during the
commitment period 2008-2012. The green house gasses by 5.2% compared
with their levels in 1990.
The meeting adopted the Buenos Aires working plan during the
Fourth Session of the Conference of the Parties held in November 1998,
which focused on the importance of implementing the convention and
preparing to put into effect the Kyoto Protocol.
The Sixth Session (COP-6) was held in July 2001, where the political
“Bonn Agreement” was reached and called for the formation of three
financial funds to support the developing countries, namely; “the Special
Fund for Climate Change”, under the framework of the convention; “the
Special Fund for the Least Developed Countries” and “the Adaptation
Fund” under the framework of Kyoto Protocol.
The Marrakech Agreement was approved at the Seventh Session

(COP-7) in November 2001, where a number of resolutions were reached
mainly; The Clean Development Mechanism Resolution and the resolution
related to Kyoto Protocol Article 3.14 on providing aid to the developing
countries their economies depend on exporting fossil fuels.
The study also reviewed President Bush’s alternative environment
plan “Clear Blue Sky and global climate change Initiative” which was
announced on 14 February 2002 where it called for reducing the green
house gas intensity in the USA by 18% within the next 10 years.
The study also reviewed the latest developments on the ratification of
the Kyoto protocol until September 2002, where the number of countries
which ratified or joined the Protocol reached 93 countries.
II. ARAB AND INTERNATIONAL COOPERATION
1- The Seventh Arab Energy Conference

The General Secretariat of the Organization of Arab Petroleum
Exporting Countries (OAPEC) organized the Seventh Arab Energy
Conference which was convened in Cairo during 11-14 May 2002 in
association with the Arab Fund for Economic and Social Development
(AFESD) and in coordination with the League of Arab States (The Arab
League) and The Arab Industrial Development and Mining Organization
(AIDMO).
The Conference lasted for four days. Its agenda included three main
items as follows:
A- Country Papers
The conference began with the addresses of the Arab ministers and
heads of the delegations, which have reviewed the energy situation in their
countries. The addresses reiterated the vital role of the energy sector in the
field of socioeconomic development and commended the national efforts in
strengthening inter-Arab relations and the Arab countries relations with the
rest of the world.
Arab and International Cooperation 153
The country papers shed light on the basis and general trends of the
energy programs in the Arab countries and reviewed; the current
developments and future prospects of oil and energy in terms of reserves,
supplies, the overall and sectoral consumption, energy prices, and pricing
policies in the local markets. The papers comprised special chapters on
major issues relating to; oil industries, energy investments, measures related
to environment conservation, development of the workforce in the energy
industry, the institutional framework of energy affairs, research and
development in the energy industry, and the inter-Arab, regional and
international relations in the field of energy.
B- Panel Discussions
The Conference agenda included four Panel Discussions with the
following themes:
First Panel Discussion: “Global Energy Developments and Their

Implications For the Arab World”
Second Panel Discussion: “Financing Oil and Gas Projects in the Arab
Countries”
Third Panel Discussion: “Energy, Economic Development and the
Environment”
Fourth Panel Discussion: “Arab Cooperation in the fields of Electricity
and Petroleum”
C- Technical Sessions:
The conference agenda included four Technical sessions with the
following themes:
First Technical Session: “Energy Resources in the Arab Countries and

the World”
Second Technical Session: “Downstream Petroleum Industries in the Arab
Countries and the World”
Third Technical Session: “Domestic Energy Consumption and
Conservation in the Arab Countries”
Fourth Technical Session: “Institutional Developments in World Energy
Markets”
The General Secretariat presented the following papers to the Seventh
Arab Energy Conference.
1- The Future of Arab and World Energy Resourses
The paper highlighted the future of energy sources and in addition to

other contradicting forecasts, it dealt with the objective dimensions of the
future energy recourses situation by examining three main resourses
namely; oil, coal, uranium, in addition to non-conventional oil resourses.
In the seventies, it was believed that there is a probability of oil
depletion. In this regard, the Club of Rome expected that demand on oil in
2000 would reach about 140 billion barrels but actually it reached only 27
billion barrels. In 1979, a study carried out by BP Company, indicated that
oil production would reach its peak by 1985. (This means that the
cumulative production had reached half the amount of the already
discovered exploitable reserves and discovered remaining oil still to be
discovered- URR), but the figures show that until that date oil production
did not reach that expected peak.
The paper tackled the non-conventional oil resourses, namely; shale
oil, bitumen (tar sands), heavy oil; their locations and quantities in some
Arab countries, exploitation potential, and obstacles surrounding them.
The paper then presented a global prospect on the international
projects aimed at producing bitumen (tar sands) and heavy oil such as the
projects of Hamaca, Sincor, Petrozuata and Cerro Negro in Venezuela. The
forecasts indicates the possibility of generating reserves during the period
from 2030 to 2040 to balance the world oil consumption since the
beginning of the oil industry (about 800 billion barrels).
The paper mentioned the impact of technical developments in
reducing exploration cost, improving production and the role of these two
factors in showing optimistic forecasts.
The paper reviewed the current and forecasted production capacities
until year 2020, and discussed the discrepancies in estimates the reasons for
such discrepancies. According to the rate of the current production, the
proven reserves will meet the world demand for the next 40 years.
Some studies suggested that the reserves would increase as a result of
continued technological development. On the other hand, in 1995, Shell’s
forecasts indicated that these reserves would not be less than 375 billion
barrels which is sufficient to increase oil supplies from the current fields for
about 14 years based on the rate of consumption for the year 2002. As for
coal, all indications show that this energy source is abundant thus covering
any demand in the long term. However, the consumption of coal will fall
back if its adverse impact on environment could not be overcome.
The paper concluded by indicating that uranium is the only source of

energy where production covers 60% of consumption, whereas, a certain
proportion will be met from the stockpile created before 1990.
As for the remainder, it was balanced from the enriched uranium,
which is obtained by decommissioning military nuclear heads. In general,
uranium is linked with nuclear energy development in generating
electricity. Its conventional reserves are sufficient for many decades to
come.
2- Study on the Future of the World and Arab Natural Gas Industry: Gas
utilization and markets”
The study briefly reviewed the natural gas situation on the

international and Arab levels in terms of proven and undiscovered reserves,
the production and consumption level during the past five years.
It also reviewed major international markets, international trade in
natural gas whether transported by pipelines or in the liquefied form in
addition to developments in its prices in the three major markets namely;
USA, Japan and Western Europe and comparing those prices to those fuel-
oil and crude oil, during 1994 to 2000.
The study also reviewed developments in the gas industry during the
past three decades, starting with the exploration and production operations
all the way through the liquefaction and the production of petroleum liquids
from natural gas and the impact of these technologies on the natural gas
economics. It also reviewed the huge natural gas consumption growth rates
witnessed in various areas of the world.
With regard to the Arab region, the study reviewed natural gas
reserves, production and consumption, and its utilization as a fuel in various
industries particularly electricity generation or as a feedstock to produce
various petrochemical products and fertilizers, in addition to natural gas
liquefaction, export and transport projects.
The study concluded that natural gas has become a major energy
source on the Arab and international levels, this state will continue and
intensify within the coming decades.
In addition, natural gas is a major source of income for some Arab
countries. Natural gas constitutes a major area for the development of joint
Arab cooperation through the construction natural gas pipeline grids linking
those countries with large reserves with those which have a shortage in
energy resources.
3- Natural Gas in the Arab Countries: An Overview

This paper was presented to the First International Conference on
Developing Gas Markets in the Arabian Gulf Area, which was held in
Abu Dhabi during 18-19 March 2002. The paper reviewed the following
issues:
• The development of natural gas reserves in the Arab countries and their
geographical distribution.
• Development of the production and consumption of gas in the Arab
countries.
• The natural gas exports.
• The natural gas future demand in the Arab countries.
• The future potential for exporting natural gas.
The paper indicated that the Arab countries natural gas reserves
reached around 40.7 trillion cubic meters at the end of 2001 or 26% of the
world reserves. While the undiscovered reserves are expected to reach 44
trillion cubic meters.
The paper mentioned that the gas production in the Arab countries
reached 415 billion cubic meters in 2000 or 13.4% of the world production.
Arab oil producers have managed to reduce the proportion of associated gas
that is flared from about 89.3% in 1970 to 4.2% in 2000 and flaring gas will
soon disappear. The paper revealed that the share of natural gas of Arab
countries total energy consumption reached 47%, and that this rate reached
90% in Qatar, 88% in Bahrain, 75% in Oman, 59% in UAE and 58% in
Algeria. It is utilized in different sectors as follows:
- Industry Feedstock and fuel 51.5%
- Electricity generation and water desalination 36.7%
- Domestic sector and services 11.8%
The paper stated that the Arab gas exports from Algeria, Libya, UAE,
Qatar and Oman reached 86.8 million cubic meters in 2000 or 14.6% of the
world gas exports. Algeria’s share reached 71.7% of the total Arab gas
exports, followed by 16.2% from Qatar.
The paper also reviewed the current liquefaction and export gas
projects, the projects under construction or study as well as the pipelines.
The paper expected that the Arab gas consumption levels will continue to
grow at a rate of 7-7.5% per year, but still the Arab countries will continue
to hold a great export potential. The study called for further Arab
cooperation in the exploitation of natural gas.
4- paper entitled “Oil and Gas Industry in the Arab Countries: Present
and Future”
This paper was presented to the First Syrian Oil and Gas Symposium,
which was held in Damascus during 2-4 April 2002. The paper indicated
that the Arab region hold enormous amounts of oil and gas reserves. The
proven oil reserves in the Arab countries at the end of 2001 were estimated
at around 651 billion barrels or 61% of the world oil reserves. While the
natural gas reserves were estimated at about 40.7 trillion cubic meters or
more than 25% of the world natural gas reserves. There is a high potential
of adding new reserves by means of:
• Realizing new discoveries, and developing the discovered ones, which
are not yet put on production.
• Better understanding of reservoirs and improving the recovery factors.
• Applying improved oil recovery techniques.
• Using new technologies.
The paper mentioned that the world of liquid hydrocarbons production
rates reached 74.5 million b/d in 2000, of which the Arab countries
produced 21.2 million b/d of oil and 2.3 million b/d of natural gas liquids
(NGL), or 31.5% of the total world production. As for the future, the paper
mentioned that the analysts forecast the increase in oil demand in the
forthcoming years to be about 1.5% per year, although the September 2001
events in the USA had a pessimistic impact with regard to this increase.
Albeit, some experts believe that this economic slump will not continue for
long, and will soon return to grow and thus raise the oil demand. In spite of
all that, it is expected that the Arab countries will provide the bulk of the
additional supplies, particularly the main oil producers which are; Saudi
Arabia, UAE, Kuwait and Iraq. This will require boosting production
capacities which will entail securing enormous investments and that on the
other hand will not take place unless there are suitable assurances of the
markets where only fair prices promote such investments.
Concerning the natural gas, the paper indicated that the Arab countries
witnessed an immense increase in consumption, particularly in the field of
generating electricity, and as a fuel and feedstock for industry.
In addition, some Arab countries export natural gas through pipelines
or in the form of liquefied gas (LNG). There are currently projects under
construction or study to establish pipelines and new liquefaction plants
aimed at increasing exports to neighbouring Arab countries or to
international markets. The paper mentioned that the total number of
refineries in the Arab countries reached 68 with a total capacity of around
6.9 million barrels/day. The Arab and international refining industry are
facing some challenges related to producing clean fuel with harsh
specifications which entails further investments.
Furthermore, the paper discussed the oil hypothetical life expectancy,
and meeting the needs of future supplies. It indicated that conventional oil
could meet the world demand at least up to 2020. However, in case of any
technical breakthrough or the production of non-conventional oil with fair
costs, then the world oil production will meet the demand at least until the
middle of this century. Finally, the paper emphasized the importance of
cooperation among Arab countries in the field of oil and gas industry.
5- Natural Gas in Arab Countries

This paper was presented to the seminar on “The Future of Natural
Gas,” which was jointly held by OAPEC and l’institut Français du Pétrole
(IFP) at the headquarters of the Institute near Paris during 25-27 June 2002.
The paper focused on the current situation and the future prospects of
the natural gas sector in the Arab countries. It mentioned that the latest
world economic developments and the environmental protection issues
particularly those relating to global warming (as their causes are uncertain)
have contributed in highlighting the significance of natural gas.
The huge investments made in the Arab countries in developing their
gas reserves over the past thirty years have resulted in a threefold
expansion, bringing their reserves at the end of 2001 to about 40 trillion
cubic meters or about one fourth of the world reserves. These reserves are
mainly located in Qatar, Saudi Arabia, UAE, Algeria, and Iraq. There are
also undiscovered resources which are estimated at about 44 trillion cubic
meters, most of it is expected to be found in Saudi Arabia, Iraq, Algeria,
Qatar, Libya and Egypt.
Arab natural gas production has expanded fivefold during the last
three decades reaching 415 billion cubic meters in 2000, which is around
13.4% of the world production. Most of this production comes from
Algeria, Saudi Arabia, UAE and Qatar.
The ratio of current production to reserves (hypothetical life
expectancy) in the Arab countries varies to a great extent. It is estimated to
be less than 10 years in Bahrain, and more than 270 years in Iraq and Qatar,
and at an average of about 89 years in all the Arab countries. Furthermore,
Arab oil producers have managed to cut the proportion of associated gas
that is flared from about 89% to just 4.2% in the same period.
The share of natural gas in total energy consumption in the Arab

countries consequently rose reaching 90% in Qatar, 75% in Bahrain, 59%
in Oman and 58% in Algeria. It is used as a fuel in the electricity generation
and water desalination plants (6.7% of total consumption), and as a fuel and
feedstock in the industry sector (31.5%).
In addition, it reached thousands of houses in Algeria, Tunisia and
Egypt use in the for/domestic sector. It is also re-injected in oil reservoirs to
maintain formation pressure. Yemen injects 98% of the total produced gas.
Algeria, Libya and Bahrain inject 36%, 32%, 24.7% respectively.
Several Arab countries export gas namely; Algeria, Libya, UAE,

Qatar and Oman through pipelines or gas tankers as LNG after the
extraction of certain gases such as liquefied petroleum gases (LPG) and
natural gasoline. The Arab countries exported around 87 billion cubic
meters in 2000 or 15% of the total world gas exports, mainly from Algeria
71.7% which possess five gas liquefaction plants, their nominal capacity
reaches 30 billion cubic meters per year. Algeria also possesses two
pipelines reaching Europe, one via Tunisia and the other via Morocco with
a capacity of 33.7 billion cubic meters per year. Each of Qatar, Oman and
Libya also possess gas liquefaction capacity reaching 12.4, 6.6 and 3.2
million tons respectively.
There are other liquefaction projects in the Arab countries which are
under construction or being planned for which could add a production
capacity of 17.8 million tons per year in Qatar and increase the capacity
from 6.6 to 9.9 million tons in Oman, in addition to establishing new
liquefaction plants with 11.2 and 6.2 million ton capacity per year in each
of Egypt and Yemen respectively.
The paper reviewed the gas grid interconnections linking Egypt with
Libya, Egypt with Jordan, Syria and Lebanon with a possibility of
extending to Cyprus, Turkey and Europe. Linking Qatari gas to each of the
UAE, Bahrain, and Kuwait with a possibility of extending to each of Oman,
Pakistan and India. Linking Iraq with Turkey, Syria and Cyprus. Syria with
Cyprus and Lebanon, and Libya with Italy.
The paper indicated that the increase in natural gas consumption in the
Arab countries during 1970-1980 reached 18.5% per year, then decline to
7.6% during 1980-2000. It is expected to reach a steady level of 7 to 7.5%
during 2000-2010, so that the total consumption would reach 236 billion
cubic meters in 2005, and 338 billion cubic meters in 2010. The paper
concluded by mentioning that the natural gas reserves in all the Arab
countries are sufficient to secure the increase in demand on natural gas and
the increase in export rates as well.
6- Hydrocarbon Potential in Near East Countries
This paper was presented to the conference on “Oil, Energy & Gas:
Prospects of The Near East Region,” which was held in Geneva,
Switzerland during 8-9 July 2002.
The paper referred to the important geological location of the Near
East Region within the Arabian Platform and the Zagros foothills, which is
rich in oil resources (oil, gas) then the paper reviewed the exploration
situation in (Iraq, Syria, Yemen, Lebanon, Jordon, Egypt and Sudan), their
proven and discovered reserves, as well as production. It also examined the
undiscovered reserves, the source rock formations, reservoir rocks, cap
rocks, and reached the following recommendations:
- The countries under study (with the exception of Lebanon and Jordon to
a certain extent) witnessed a vast exploration and development activities.
Yet these activities did not cover all the promising areas and did not
penetrate the deep formations of the discovered fields. It is believed that
continuing and expanding these activities will lead to an enormous
additions to the oil and gas reserves.
- These countries are concerned to reach some kind of agreements with
investors and specialized companies that possess technologies and
market outlets, in order to carry out the exploration and the development
of the oil and gas resources. These agreements could be in the form of
service contracts, joint contracts, production sharing contracts or any
other arrangements that satisfy both parties.
7- “Improved Oil Recovery in the Arab Countries: Current and Future”

This paper was presented to Kuwait’s First International
Conference on “Improved Oil Recovery (IOR),” which was held in
Kuwait during 14–16 December 2002. The paper comprised a summary on
the oil production methods, and focused on the improved oil recovery
techniques and their impact on improving the recovery factor and the
increase of recoverable reserves.
The paper gave examples from some Arab countries and their
achievements. It also estimated the remaining oil in the reservoirs after
applying the primary and secondary conventional oil recovery, at about
1539 billion barrels. If 10% of the reserves in place, could be recovered
then 260 billion barrels or a quarter of the world’s current proven reserves
could be added or an additional 10 years at the world’s current oil
production rate.
8- The Future of Arab and International Refining Industry and the Role
of Scientific Research in its Development
The study analysed demand growth rates on refined oil product in the
Arab and world which was witnessed in the past few decades and was
attributed to the volatility of oil prices and the world economic growth,
which reached 1.4% per year during 1985-1997. It was affected negatively
in 1998 due to the economic crisis of the Eastern Asian countries. It is
projected that world demand on refined oil products will grow around 2%
per year during 2000–2010 and by a 1.6% annual growth rate during 2010-
2015.
The recommendations of the study can be summarised as follows:
• In 2000, North America held around 28% of the world refined oil
products consumption, followed by Asia 26%, Eastern Europe 20.3%.
As for the Arab countries, they held only 4.7% of the total world
consumption. The demand growth rates varied on refined oil products
from one product to the other and according to the different parts of the
world.
• The Worlds primary atmospheric distillation in oil refineries reached
81.4 million b/d by the end of 2000. Asia holds the lions share reaching
23.5%, followed by USA with 12.6%, followed by Western Europe
17.5%, then Eastern Europe and the FSU 9.9%. The Arab countries share
was 8.2% of the total world energy in the same year. By the end of 2015,
the total primary atmospheric distillation is expected to rise by 13.5
million b/d than its levels in 2000. This increase is expected to come
mostly from Asia 64.5% followed by USA 16.5%. The Arab countries
share in the prospective increase will reach 3.7% only.
• There is a projected increase in the capacities of other refining operations
by the end of 2015 namely; hydro-cracking operations, fluid catalytic
cracking, hydrotreating, alkylation, reforming, coking, isomerization,
oxygenates, and hydrogen production.
• The study reviewed the world oil refinery production rates to incorporate
all kinds of refined oil products and compared the world’s consumption
to production.
The comparison shows the following conclusions:
1- USA and Asia are importers of all kinds of refined oil products, as they
both suffer from a shortage; it is projected that this situation will
continue until 2010.
2- The Arab countries and Latin America are exporters of refined products.
Western and Eastern Europe are importers of some refined oil products
and exporters of others.
3- The study confirmed the importance of scientific research in the
development of the refining industry and gave examples to that, where
it developed distillation operations from a batch process to a continuous
process. The reforming processes witnessed an increase in the
conversion ratio and the type of new catalytic agent; it also reviewed
the impact of scientific research on developing both the production
techniques or technologies and the kind of catalytic agents in all types
of refining operations.
4- The study concluded by highlighting the challenges facing the refining
industry represented by environmental laws and legislations requires
the production of clean fuels which in turn requires a high flexibility in
the oil refineries.
Date and venue of the Eighth Arab Energy Conference

The conference welcomed the invitation of H.E. Mohamed Al-
Batayna, Minister of Energy and Mineral Resources, The Hashemate
Kingdom of Jordan, to convene the Eighth Energy Conference in Amman
in the year 2006.
2- Seminars and Meetings Organized by the General Secretariat
2-1 The Future of Natural Gas Seminar
In accordance with the General Secretariat’s plan of action 2002,

which was approved by the Ministerial Council, a joint seminar was held by
OAPEC and l’institut Français du Pétrole (IFP) at the headquarters of the
Latter in Paris during 25-27 June 2002.
The theme of the seminar was “The Future of Natural Gas.” OAPEC’s
Secretary General and the President of IFP opened the seminar.
The seminar was attended by 102 energy experts, 60 of those were

from OAPEC member countries, with the exception of Iraq. Other Arab
experts participated from Tunisia,Yemen and the General Secretariat of
OAPEC. The other participants were from the IFP and various international
companies and research centers.
A total of 31 technical papers and one case study were presented, 12

of those papers and the case study were presented by Arab experts which
cover issues on natural gas reserves on the international level, and their
geographical distribution, demand growth, production capacity, the role of
advanced technologies, production and transportation costs, liquefaction
technologies, ethane recovery and gas liquefaction.
2-2 Prospective Cooperation in the Exploration of Natural Gas

In pursuit of the recommendations issued at the first working group
meeting which was required to study possible cooperation in the
exploration of natural gas, and which was approved by OAPEC’s
Ministerial Council in accordance with OAPEC’s 2002 plan of action, the
second meeting of the aforementioned working group was held in Cairo
during 1-2 October 2002. Specialists from all the member countries
participated in the meeting with the exception of Libya. OAPEC’s
Secretary General welcomed the participants and explained the meeting’s
background and objectives. OAPEC’s Director of the Technical
Department briefly reviewed the General Secretariat’s efforts to follow-up
the implementing of the recommendations of the first meeting of the
working-group.
Experts from each member country presented a brief review of the
natural gas industry and the achievements reached on future projects, with
particular emphasis on any development reached since the first meeting.
The participants also discussed the means and possibilities of future
cooperation in the exploration in natural gas. The conclusions reached
following the presentations and the discussions can be summarized as
follows:
- The Arab countries have witnessed an expansion in the use of natural gas
domestically, particularly in the generation of electricity and in various
industries where natural gas is not only used as a source of energy but
also as a feedstock, in addition to the use household and other areas such
as the Egyptian experience to transform some automotive vehicles in
Cairo to operate with both gas and gasoline.
- There is an ongoing expansion in the gas liquefaction projects in some
member countries such as Qatar, Egypt and Algeria for the purpose of
export.
- The participants commended the gas pipeline projects which were
achieved linking the member countries to other Arab countries namely;
the “Dolphin Project” which links Qatar with UAE, the project linking
Qatar with Kuwait and Qatar with Bahrain and the project linking Egypt
with each of Jordan, Syria and Lebanon on one side and Libya on other
side.
- The participants expressed their desire in continuing cooperation and

exchanging information and expertise in all aspects related to the natural
gas industry. Several recommendations were adopted.
2-3 Ninth Coordination Meeting of Environment Experts in OAPEC

Member Countries
OAPEC’s General Secretariat held the ninth Coordination Meeting of

Environment Experts in Cairo on 5-6 October 2002, in cooperation with the
General Secretariat of the League of Arab States (The Technical Secretariat
of the Council of Arab Ministers responsible for Environmental Affairs).
The purpose of the meeting was to coordinate the stands of Arab
countries at the Eighth Session of the Conference of the Parties (COP-8)
to the UN Framework Convention on Climate Change (UNFCCC) and
its Subsidiary Committees, which was held in New Delhi, India during
23/10-01/11/2002.
Delegates from all the member countries attended the meeting with
the exception of Libya. An expert from Oman, one from the GCC General
Secretariat, two from the Arab League General Secretariat in addition to
OPEC’s, and OAPEC’s General Secretariat delegation also attended.
OAPEC’s Secretary General opened the meeting by welcoming the
participants and highlighted the latest 2002 developments on the “Climate
Change Convention” and the “Kyoto Protocol”. He specifically referred to
the Marrakech Agreement, which was adopted at the COP-7 in Marrakech,
29 October to 9 November 2001. He expressed his wishes for the success of
the meeting in adopting recommendations which would enhance Arab
coordination at the negotiations at New Delhi meeting.
OAPEC's Director of the Technical Affairs Department presented a
working paper that reviewed the latest developments on the Climate
Change Convention and the Kyoto Protocol and reviewed the main items
on the agenda of the (COP-8). He also referred to the contents of President
Bush’s alternative environment plan, to replace the Kyoto protocol and to
the ratification of the European Union and Japan to this Protocol. He
reviewed the results of the World Summit on Sustainable Development
which was held in Johannesburg, South Africa during 26 August to 4
September 2002.
Mrs Fatima Al-Mallah, Director of the Technical Secretariat of the
Council of Arab Ministers Responsible for the Environment presented a
working paper on behalf of the Arab League Secretariat relating to the Arab
preparation for the (COP-8).
The paper reviewed the efforts made within the Arab League
framework and the recommendations adopted by the Executive Bureau of
the Arab Ministers Responsible for Environment Affairs at its preparatory
meeting for the Eighth Session of the (COP) which was in Damascus
during 21-23 May 2002. She also reviewed the results of the Johannesburg
Summit and Arab initiatives at the Summit and called for benefiting from
the initiatives proposed within the framework of sustainable development
particularly those concerning energy issues.
There followed an in-depth discussion of the items on the agenda of

the Eighth Session of the (COP) and means of coordination its stands. The
participants reached several recommendations.
3. Conferences, Seminars and Meetings Attended by the General

Secretariat
3-1 The Economic and Social Council Sessions; Follow-Up of the

Progress of Work in the Greater Arab Free Trade Area (GAFTA)
OAPEC’s General Secretariat attended as an observer the 69th and the

th
70 Sessions of the Economic and Social Council which were held during
11-12 February and 9-10 September 2002 respectively.
The Sessions were attended by delegations from all the Arab states
with the exception of Somalia and the Comoros, as well as representatives
from 22 Arab organizations. The agenda of both Sessions focused on the
(GAFTA).
The GAFTA embraces 15 member countries inclusive of the Sudan.

The GAFTA members encompasses: Jordan, UAE, Bahrain, Tunisia, Saudi
Arabia, Syria, Iraq, Oman, Qatar, Kuwait, Lebanon, Libya, Egypt, and
Morocco. The Palestinian delegate informed the General Secretariat of the
Arab League the approval of the Palestinian Ministerial Council of its
membership to the Area.
Algeria announced its decision to ratify the Agreement on “Promoting

Trade between Arab Countries” in preparation for its membership to the
Area. In addition, Mauritania ratified the Agreement.
This brings the total Arab countries which ratified the Agreement to
20 countries. Djibouti and the Comoros are the two remaining countries
which have not ratified the agreement until now.
Members of the GAFTA adopted measures to put the Area into

operation. As of the 1st of January 2002, the fifth reduction of 10% was
applied on customs tariffs and those tariffs and taxes with a similar effect,
bringing the total reduction to 50% since the inauguration of the Area in
1998.
The Economic and Social Council approved a further 10% reduction

in the customs tariffs and those tariffs and taxes with similar effect in 2003,
and another 20% reduction in 2004, then a final reduction of 20% in 2005.
With this, the member countries will be able to cut down the period
required to finalize the Area from 10 years to 7 years.
The Arab Summit which was held in Beirut decided that “The
Economic and Social Council will be responsible for the speedy finalization
of the concept and suggestions for the Arab customs union study which will
be presented to the next Arab Summit.”
3-2 Sixth Meeting of Experts from Energy Exporting and Importing

Countries
The General Secretariat participated in the sixth meeting of experts for

the energy exporting and importing countries which was held during 28-29
January 2002 in Abu Dhabi, UAE.
The meeting was co-organized by the UAE’s Ministry of Petroleum

and Mineral Resources, the Secretariat General of the Gulf Cooperation
Council, the International Energy Agency, industrial countries members of
the Agency, international oil companies, research institutions, as well as
representatives of the OPEC.
Deliberations focused on several issues relating directly to energy

exporting and importing countries.
These included; cooperating to provide oil data on a regular basis to

be able to follow-up the developments on supplies, production,
consumption, trade and reservoir levels, as well as prospects of OPEC and
IEA with regard to the factors affecting the utilization of oil and its supplies
up to 2020, and finally the views of the participants on the future of
dialogue between exporters and consumers.
The participants focused on the proposal of H.H. the Saudi Crown

Prince in November 2000 to establish a permanent secretariat to give the
dialogue an institutional framework.
3-3 Experts’ Meeting on the Results of the Fourth Ministerial

Conference of the World Trade Organization and the Preparation
for the Forthcoming Negotiations
OAPEC’s General Secretariat attended a meeting of experts on the

results of the Fourth Ministerial Conference of the World Trade
Organization and the preparation for the forthcoming negotiations, which
was held at the ESCWA’s headquarters in Beirut during 5-6 June 2002.
The purpose of the meeting was to discuss the Doha Development
Agenda, which was issued by the Fourth WTO Ministerial Conference and
to study the issues that are of concern to the Arab states such as: trade,
investment and technical assistance which are provided by ESCWA to its
member states, in addition to the preparation for the forthcoming
negotiations.
The program covered three main topics: (1) Discussing the
Declaration issued by the Fourth WTO Ministerial Conference in Doha and
the issues of prime concern to the Arab states such as access to markets,
intellectual property right and trade in services. (2) New topics and issues
related to implementation such as; competition, trade, and government
procurement. (3) Technical cooperation in WTO matters.
The meeting was inaugurated by H.E. Mrs Mervat Tilawi, ESCWA
Executive Secretary, and attended by H.E. Basil Filaihan, Lebanon’s
Minister of Economy and Trade. Participants included government
representatives from ESCWA states, specialists from Arab states, and
representatives from regional and international organizations.
The following recommendations were reached:

1- The importance of the energy services, as it is a vital issue for most Arab
countries, as well as being the only issue among energy issues tackled
at the WTO.
2- The Arab oil-producing countries enjoy a strong negotiating status with
regard to negotiations on energy services. This is attributable to the oil
reserves it holds. Building alliances with other countries with similar
interests will help to reinforce this negotiating power in the field of
energy services.
3- The importance of the proper Arab preparation for the current and future
negotiations pertaining to the means of cooperation with the WTO, the
ESCWA countries and UNCTAD and to build cadres in each country
owing to the variation of interests from one country to the other.
3-4 Expert Meeting on Capacity Building and Regional

Integration for Developing a Sustainable Energy Sector in
ESCWA Countries
OAPEC’s General Secretariat participated in this meeting in response
to an invitation from the UN Economic and Social Committee for Western
Asia (ESCWA), which organized the meeting and was held in Beirut during
15-17 October 2002.
Representatives from ESCWA countries and several regional and
international organizations participated in the meeting including the UN,
UNESCO and OAPEC. The meeting evaluated the progress made by
ESCWA countries in achieving sustainable development, and in capacity
building and regional integration in line with the recommendations made
by the Second Earth Summit held by the UN in Johannesburg in
September 2002.
OAPEC’s General Secretariat presented a paper on the natural gas
interconnection grids linking Arab countries and included their views on
the advantages of regional cooperation in the field of natural gas so as to
reinforce their socioeconomic and environmental developments.
The participants emphasized the importance of using clean energy to
supply the various sectors of ESCWA countries with their needs of fuel and
feedstock and especially natural gas where it had increased its share to 40%
of the total consumed energy, compared to 30% fifteen years ago.
Furthermore, a combined cycle technology was introduced to 10% of the
power stations of the ESCWA countries. There was also expansion in the
utilization of solar energy and wind energy in areas where those resources
are available. The advantages of the utilization of clean energy was
reinforced after the creation of electricity and natural gas interconnection
grids among some Arab countries which commenced by linking Egypt to
each of Jordan, Syria and Lebanon. The concerned authorities launched the
first phases of the natural gas projects linking the Gulf countries.
The meeting reached several recommendations which reiterate the
importance of building the regional and national skills needed for achieving
sustainable developments in the energy sector and to increase its
participation to incorporate the growing needs of the Arab countries, as per
the circumstances of each individual country.
3-5 Seminar on the Impact of the World Trade Agreements on the

Industrial Sector in the GCC States
The General Secretariat participated in the seminar on “The
Repercussions of the World Trade Accords for the Industrial Sector in the
GCC States,” which was held in Doha, Qatar on 11 March 2002. It was
supervised by the Gulf Organization for Industrial Consulting (GOIC) in
collaboration with the World Trade Organization (WTO).
H.E. Abdullah bin Hamad Al-Atiya, Qatar’s Minister of Energy,
Industry, Electricity and Water, opened the seminar, which was attended by
60 participants from ministries of commerce, industry, and energy, as well
as federations of chambers of commerce and industry in the GCC states.
The program covered 3 main issues:
- The objectives and activities of the WTO and the challenges and the
potential of the industrial sector in the GCC states under the framework
of the WTO agreements. In addition to the objectives and activities of the
Gulf Industrial Investment Organization.
- Getting acquainted with the fundamental principals governing the work
structures of the WTO particularly those relating to the most favoured
nations, national treatments and intellectual property rights.
- Reviewing the texts and accords relating to crude-oil as they appeared in
the final document of the Uruguay Round and their impact on trade in
oil-exporting countries.
In conclusion, the seminar issued a number of recommendations
namely; the maximum benefit from the “preferential treatment” which the
Agreement grants to the developing countries, the call for employing the
membership of the WTO as a pillar to reinforce and bolster negotiations
with the consuming countries to facilitate resolving the pending issues of
oil and related industries.
3-6 The Higher Coordination Committee For Joint Arab Action

OAPEC’s General Secretariat participated in the Higher Coordination
Committee for Joint Arab Action, which was held in Alexandria during 3-4
July 2002, at the headquarters of the Arab Academy for Science,
Technology and Maritime Transportation.
The meeting was attended by directors, heads of Arab organizations
and ambassadors of many Arab countries in addition to the Assistant
Secretary Generals of the Arab League.
The purpose of the Committee was to follow-up the results of the first
meeting of Supreme Coordination Committee, which was held in Cairo on
5 July 2001, and to discuss means of coordination between the General
Secretariat of the Arab League and the Arab organizations, and to seek
development methods for joint Arab action institutions.
The agenda included three main items:
1- Follow-up of the results of the first meeting of Higher Coordination

Committee for Joint Arab Action, which was held in Cairo on 5 July
2001.
2- Follow-up of the steps to develop joint Arab action institutions.
3- Implementing Beirut Summit resolutions.
H.E. Amr Moussa, Arab League Secretary General and Chairman of
the Coordination Committee of Joint Arab Action welcomed the
participants leading the joint Arab action.
They discussed a report on the results of the First Coordination
Committee meeting for the general directors of Arab organizations which
was held in Rabat during 20-22 June 2002, and papers and suggestions
presented by the participating organizations and institutions of the joint
Arab action.
The meeting adopted several recommendations presented by the
participating organizations and the Arab League General Secretariat. They
decided that the next Committee meeting would be held during 2-3 July
2003. The meeting adopted the following recommendations:
1- A strategic plan to be set for each organization, and to make plans for
the next ten years with the goal of reaching Arab economic integration.
2- The importance of the Arab national and regional financial
organizations participation in the Committee meetings.
3- Arab investments and the investment map which was prepared by the
Arab Economic Union Council should be developed, in collaboration
with the specialized Arab unions and the Arab financial institutions.
4- The call for further cooperation between the specialized Arab
organizations and the public union for commerce and agriculture in the
Arab countries as a representative for the private Arab sector.
5- The call for the Arab countries to deal with the Arab organizations as
houses of expertise.
3-7 Oxford Energy Seminar

The Oxford Institute for Energy Studies held its 24th Seminar in St.
Catherine’s College, Oxford University, UK, during 2-12 September 2002,
with the theme “World Energy: How to Understand and Cope with a very
Uncertain World”.
Professor Robert Mabro, Director of the Institute organized the

seminar. The Seminar is co-sponsored by St. Catherine’s College,
Organization of the Petroleum Exporting Countries (OPEC) and
Organization of Arab Petroleum Exporting Countries (OAPEC).
The Session was attended by 67 participants representing the
consuming and producing oil countries, regional and international institutes
and organizations and national and international oil companies. The total
number of Arab participants reached 24.
Deliberations were made on several issues relating to the world
economy, and the economic and political developments which the world is
witnessing.
The seminar reached the following conclusions:

- It is projected that the world demand for oil will increase by 60% by
2020, and the Middle East will raise its share in the world supply from
27% in 2001 to 33% in 2020.
- OPEC is facing challenges on the perspective term, namely, maintaining
its credibility and its commitments throughout 2003, in addition to its
ability to control the oil market during the next five years.
- Natural gas share has increased in the world energy mix from 18% in
1976 to 23% in 2001, while oil share was reduced from 45% to 40%
during the same period.
- The national oil companies have faced major challenges such as; the
nature of management of the state, their expectations in terms of
achieving the highest oil revenues and providing job opportunities,
participating in the developments, in addition to competing in the world
markets.
- In 2003, there will be a slight rise in oil production from non-OPEC
members, particularly from Russia, whereas there will be no increase
whatsoever by non-OPEC members from the Middle East.
- There is need to improve the oil investment environment in Russia to
attract international oil companies, though Russian oil can never be a
substitute to the oil of the Middle East by any means.
3-8 The Eighth International Energy Forum

In response to an invitation from both the Japanese Minister of
Economy & Industry and the Minister of Foreign Affairs, OAPEC’s
Secretary General and the Energy Specialist at OAPEC participated in the
Eighth International Energy Forum held in Osaka, Japan during 21–23

September 2002. The Forum was attended by many energy experts, as well
as representatives of 65 different countries and 10 organizations.
Deliberations were made during the four sessions on energy supplies
and the security of demand according to views of both OPEC and the IEA.
The participants reiterated the importance of energy market stability and
transparency particularly in the oil sector, in order to reduce price volatility,
which harms both producers and consumers, and requested accuracy and
timeliness of data provided for the decision makers.
The eighth Forum concluded by adopting the suggestion of H.R.H.
Crown Prince Abdullah Bin Abdul Aziz of the Kingdom of Saudi Arabia at
the 7th IEF to establish a permanent secretariat for the Forum in Riyadh.
The Forum evaluated the land and construction facilities provided by the
Kingdom to the Secretariat. The Forum accepted the Netherlands invitation
to host the next 9th International Energy Forum, set to be sponsored by Iran
as a representative of OPEC and Norway as a representative of the
industrial countries.
3-9 First Conference on “Developing Gas Markets in the Arabian Gulf

Area”
In response to an invitation from the IBC Gulf Conferences, OAPEC’s
General Secretariat participated in the First International Conference on
Developing Gas Markets in the Gulf Region, which was held in Abu Dhabi
during 18-19 March 2002. The General Secretariat presented a paper
entitled “Natural Gas in the Arab Countries: An Overview.” The conference
was held under the patronage of H.E. Obeid bin Seif Al-Nasseri, Minister
of Oil and Mineral Resources in the United Arab Emirates. It was
sponsored by Dolphin Energy Company Ltd.
Some 50 participants attended the conference, mostly from
international gas companies and finance institutions. There were only a few
Arab participants from the UAE, Qatar, Oman, Bahrain, and OAPEC’s
General Secretariat. The two-day conference had focused on the following
issues:
• The Dolphin Project and the Gulf-South Asia Gas Project.
• The gas industry in the Arab countries.
• The increasing role of gas in Europe and the growth of gas exports in
the form of GTL liquids.
• Long-distance gas pipelines.
• Offshore gas pipelines.
3-10 Third European Fuel Conference
OAPEC’s General Secretariat took part in the Third European Fuel

Conference, which was held in Paris on 18-20 March 2002. It was
organized by the World Refining Association in collaboration with Axens
Company which belongs to the technological group of l’Institut Français de
Pétrole.
The papers submitted to the conference reviewed topics which

covered; the current and future prospects of the refining industry in Europe
the USA, analyzing the world market demand for refined oil products and
its impact on oil refinery profit margins, European policies for clean fuel
production, launching the second phase of the Auto-Oil Program so as to
meet the requirements of the European climate change program, the
strategy of shifting to alternative fuels and related investments, the
viewpoint of the federation of car manufacturers on conventional fuel as
opposed to biological fuel, and new technologies in various refining
processes, in addition to other topics.
Over 300 experts attended the conference, representing a number of

the world’s biggest refining companies, research centres such as IFP, the
European Fuel Association, and OAPEC.
3-11 First Syrian Oil and Gas Symposium
In response to an invitation from the Syrian Ministry of Oil and

Mineral Resources, OAPEC’s General Secretariat contributed to the First
Syrian Oil and Gas Symposium, which was held in Damascus during 2-4
April 2002. OAPEC’s General Secretariat presented a paper entitled “The
Oil and Gas Industry in the Arab World: Present and Future.”
The day before the symposium H.E. the Syrian Minister of Oil and
Mineral Resources opened Syroil 2002, the third Syrian-International Oil
and Gas Exhibition. There was a wide range of Syrian, Arab, and
international participation, to get acquainted with the latest technologies
and equipment in the international oil and gas industry. The exhibition
proceeded from 1-5 April 2002.
The theme of the symposium was “The Oil and Gas Industry and the
Challenges of Development.” It was inaugurated by H.E. Dr Ibrahim
Haddad, the Minister of Oil and Mineral Resources, on behalf of the
symposium’s patron, the Syrian Prime Minister.
In the course of the symposium’s three-day program, 33 technical

papers were presented by Syrian and Arab specialists and by some
international companies operating in Syria or participating in the exhibition.
Over 200 experts from local and foreign companies working in
various branches of the oil and gas industry in Syria attended the
symposium. Other Arab specialists were participating from Iraq, Egypt,
OAPEC, and the Arab Petroleum Investments Corporation (APICORP).
3-12 Seminar on Oil Spills- Prevention and Control

In response to an invitation from the Kuwait Society of Engineers,
OAPEC’s General Secretariat attended a seminar on “Oil Spills-Prevention
and Control” which was presented by Mr. Ian Lambton, a consultant and
expert on convening training courses on oil spill preparedness and safety.
The seminar tackled the following issues:
• Safety: This aims to protect employees, the public, property and
environment. It covers a collection of measures referred to in the
Material Safety Data Sheet, which include; identifying chemical
materials and their composition; describing toxic and hazard materials,
exposure guidelines and first aid measures; emergency response action
plans; and supplying information about the factory.
• Personal protection equipment: This includes a long list of essential
equipment for individuals, sites, and means of transport through which
personal and corporate safety can be achieved. Using such equipment
operations and emissions can be monitored in preparation for any
intervention when necessary.
• Monitoring system: This system continually monitors the site, prepares
brief reports on its safety, and manages the work of the teams in charge
of supervising safety measures.
• Area designation: According to this, zones are classified as red zones
(where pollution and contamination occurs or coulds occur), yellow
zones (between polluted and clean zones), or green zones (clean). The
safety measures to be adopted at each site depending on this
classification.
• Socio-economic Resources: These are related to the provision of
information and references on all cultural and historical resources,
drinking water, fisheries, agriculture and tourism.
• Environmental protection: This aims to conserve and protect sensitive
areas, safeguard terrestrial and aquatic life, preserving flora and coral
islands and colonies.
• Impact factors: These include specifying and identifying the type of oil
spills and quantity, sensitivity of resources, sensitivity of habitats,
weather and response of flora and fauna to pollutants.
• Environmental planning: This involves compiling resource mapping
leakage sites and zones, prioritizing areas to be protected, and training
and equipping the personnel responsible for implementing the measures.
• Analyzing environmental benefits: This includes informing all the
authorities and stakeholders involved with Oil Spills, comparing the spill
response methods and types of incident response, and assessing the
environmental situation and prioritizing resources at risk based on
environmental and socio-economic factors in order to minimize the risks
and limit the magnitude of impacts and enhance recovery.
3-13 Meeting of the Executive Bureau of the Council of Arab Ministers

Responsible for the Environment
OAPEC’s General Secretariat took part in the twenty-eighth meeting
of the Executive Bureau of the Council of Arab Ministers Responsible for
the Environment, which was held in Damascus during 21-23 May 2002.
Delegates attended from Egypt, Kuwait, Lebanon, Morocco, Saudi Arabia,
Syria, Tunisia, and Yemen, all of which are members of the Executive
Bureau, in addition to representatives of some Arab and regional
organizations.
H.E. Adnan Khozam, the Syrian Minister of the Environment
welcomed the delegation heads and members from Arab states and wished
them success in reaching appropriate resolutions. Several recommendations
were adopted after reviewing the items of the agenda.
3-14 Oil, Energy and Gas conference: Perspectives of the Near East
Region
In response to an invitation from the conference organizers (CWC
group and MEES), OAPEC’s General Secretariat participated in the Oil,
Energy and Gas Conference held in Geneva during 8-9 July 2002, and
presented a paper entitled “Hydrocarbon Potential in Near East Countries”.
A total of 70 participants attended the conference, including official
delegations from Iraq, Syria, Lebanon and Jordan, in addition to other
regional and Arab institutes and companies. The conference considered
and assessed various issues on oil, gas and electrical energy in the Near
East Countries defined by the sponsors as Iraq, Lebanon, Jordan, Yemen,
Egypt, Sudan, and Turkey.
3-15 High-Ranking Arab Officials’ Preparatory Meeting for the

Participation in the World Summit for Sustainable Development
In response to an invitation from the General Secretariat of the Arab
League, “The Economic Department - The Technical Secretariat of the
Council of Arab Ministers Responsible for Environment Affairs”, the
General Secretariat of OAPEC participated in the high-ranking Arab
officials’ meeting held in Cairo during 30-31 July 2002 to prepare for the
Arab participation in the World Summit for Sustainable Development
(WSSD), which was scheduled to be held in Johannesburg, South Africa,
from 26 August to 4 September 2002.
The Meeting was attended by representatives from 16 Arab countries
and 9 Arab and original organizations comprising OAPEC, Arab
Environment and Development Network, Arab Forum for Environment
and Development, Economic and Social Committee for West Asia
ESCWA, UNEP / Regional Office for West Asia.
The Meeting aimed to exchange opinions and coordinate the Arab
stands among the high-ranking officials participating at the World Summit
for Sustainable Development.
The agenda included two main items; the Arab initiative for
sustainable development; and completing the Arab preparation to
participate in the World Summit for Sustainable Development. Other
issues were also discussed. The meeting adopted several recommendations
relating to coordination.
3-16 Tenth Abu Dhabi International Petroleum Exhibition and

Conference ADIPEC 2002
OAPEC’s General Secretariat participated in The 10th Abu Dhabi
International Petroleum Exhibition and Conference (ADIPEC 2002) which
was convened under the patronage of H.R.H. Sheikh Khalifa Bin Zayed Al-
Nahayan, Crown Prince of Abu Dhabi, and Deputy Chief Commander for
Armed Forces and President of the Supreme Council for Petroleum.
The Exhibition and Conference were held at Abu Dhabi International
Exhibition Centre during 13-16 October 2002. It was attended by some
Arab oil ministers and representatives from international oil companies.
Around 2,500 participants attended the conference. 98 papers were
submitted by specialist from twenty countries, some of which were
reviewed throughout 14 sessions, in addition to 4 roundtable discussions
addressing issues related to environment and its protection, human
resources development, reservoirs management and data processing.
The theme of the conference was “Adapting to Future Challenges.”

The main deliberations covered a wide range of issues and challenges
involving the future prospects of oil and natural gas industry starting off by
exploration and drilling and reaching to various production stages,
transportation, oil refining, marketing... etc. they also dealt with the new
technical and technological challenges and methods of staff training in the
oil and gas industries vis-à-vis production in order to be well-versed with
these technologies as this is the only means to guarantee the development
and improve of these industries in association with the environment
protection standards. Giant petroleum and oil services companies exhibited
their latest products in the field of services and technical support.
3-17 The 14th Session of the Council of Arab Ministers Responsible for
Environmental Affairs and it’s Executive Bureau and the
Meetings of the General Assembly of the Joint Committee on the
Environment and Development
OAPEC’s General Secretariat participated in the 14th Session of the

meetings of the Arab Council of Ministers Responsible for Environmental
Affairs, which was held in Sharm el-Sheikh, Egypt, during 23-24 October
2002. Prior to this, the Council’s 29th Executive Bureau was convened on
22 October 2002.
The General Secretariat also attended the 3rd Session of the General
Assembly of the Joint Committee on the Environment and Development in
the Arab World, on 20-21 October 2002.
The purpose of the General Assembly and Executive Bureau meetings
was to prepare for the meeting of the Council of Arab Ministers
Responsible for the Environment. The agenda included several of which:
1. Greater Arab Free Trade Area and issues related to trade and
environment.
2. Results of the Earth Summit on Sustainable Development.
3. Following up of the international agreements on environment.
Delegations from all Arab countries except Somalia, Lebanon, and the
Comoros attended the Council’s meetings, most of which were chaired by
ministers. Also participating were representatives of 13 Arab organizations,
two international organizations (The UNEP delegation was headed by
UNEP Executive Director, Dr. Klaus Toepfer, and the United Nations
Industrial Development Organization), and one regional organization (the
Economic and Social Council for Western Asia, ESCWA).
The Council discussed the items on the agenda and adopted several
decisions of which:
• To follow-up the Earth Summit on Sustainable Development resolutions

by applying the Sustainable Development Initiative in the Arab Region.
• To ensure that the Arab stand on the topics submitted to the Eighth
Conference of the Parties to the UNFCCC is tuned with the
recommendations agreed upon at the OAPEC’s Ninth Coordination
Meeting of Environment Experts.
• The topic for the 2004 prize to be awarded by the Council of Arab
Ministers Responsible for the Environment will be “The Impact of
International Energy and Environment Measures and Policies on
Sustainable Development in the Arab States”.
• The Council’s 15th Session will be held in Libya on 10-11 December
2003.
3-18 Eighth Session of the Conference of the Parties to the United

Nation Framework Convention on Climate Change
The 8th Session of the Conference of the Parties (COP-8) to the UN
Framework Convention on Climate Change (UNFCCC) was held in New
Delhi, India, during 23 October to 1 November 2002. Some 5,000
participants attended the conference representing 175 countries. Following
in-depth discussions, they drew up decisions related to procedural matters
and the New Delhi Ministerial Declaration on Climate Change and
Sustainable Development.
The industrial countries have tried on many occasions to add new
articles related to applying new commitments to the developing countries.
However, the firm united stand of the G77 and China precluded this to take
place.
The New Delhi Declaration comprised the following:
a) National sustainable development strategies should integrate more fully
the climate change objectives in key sectors such as water, energy,
health, agriculture, biodiversity, and build on the outcome of the World
Summit for Sustainable Development.
b) All parties, taking into account their common but differentiated
responsibilities and respective capabilities, should continue to advance
the implementation of their commitments under the Convention to
address climate change and its adverse impact in order to achieve
sustainable development.
c) Adaptation to the adverse impact of climate change is of high priority

for all countries. Developing countries are particularly vulnerable,
especially the least developed countries and small island developing
states.
d) Actions are required to diversify energy supply by developing
advanced, cleaner, more efficient, affordable, and cost effective energy
technologies, including fossil fuel technologies and renewable energy
technologies and their transfer to developing countries.
The Conference elected Mr. Fadel Lary, from Kuwait, to be the Vice
President of the Subsidiary Body for Implementation.
4- The Unified Arab Economic Report

A preparatory meeting to compile the Unified Arab Economic Report,
2002, was held at the headquarters of the Arab League Secretariat General
during 21-23 January 2002. It was attended by representatives from the
Arab League, the Arab Monetary Fund, the Arab Fund for Economic and
Social Development, and the Organization of Arab Petroleum Exporting
Countries.
The participants reviewed the Unified Arab Economic Report, 2001;
the comments submitted by the Arab states, and the preparation of the 2002
report.
The meeting discussed and approved the contents of the chapters in
the new edition. It was agreed that the thematic chapter of the 2002 report
would address the topic “Privatization Policies in the Arab States”. It would
evaluate the privatisation experience of the Arab world. Other chapters in
the report should adhere to this thematic topic as much as possible.
As for the second meeting, it was held in the headquarters of the Arab
Monetary Fund in Abu Dhabi, UAE, during 23-27 June 2002. Participants
at the meeting were representatives from the Arab League, Arab Monetary
Fund and the Arab Fund for Economic and Social Development.
The meeting deliberations reviewed; the report’s statistics; the initial
draft chapters of the report which were discussed by the participating
organizations, an inclusive review in preparation to its submission next
September 2002 to each of; the Economic and Social Council of the Arab
League, the Board of Governors of Central Banks, and the Arab monetary
institutions.
OAPEC’s General Secretariat also participated in the preparatory

meeting to discuss the 2003 report, which was held during 24–26 December
2002 at the headquarters of the Arab Fund for Economic and Social
Development in Kuwait. The meeting was attended by representatives from
each of; the Arab League, the Arab Monetary Fund, the Arab Fund for
Economic and Social Development, and the Organization of Arab
Petroleum Exporting Countries.
The participants discussed the Unified Arab Economic Report 2002 as
well as the remarks put by the Arab countries and the preparation of the
2003 report. The meeting discussed the contents of the Report which were
agreed upon.
III. ENERGY RESOURCES MONITOR-ARAB AND

INTERNATIONAL
The Secretariat General continued to publish its quarterly bulletin
entitled Energy Resources Monitor - Arab and International in 2002. The
bulletin covers developments in oil and gas exploration activities in
OAPEC member and non-member Arab countries and non-Arab countries.
It also highlights new technologies, relying for its data on information
published in Arab and international periodicals.
IV. ENCOURAGEMENT OF SCIENTIFIC RESEARCH
Results of Judging the OAPEC Award for Scientific Research, 2002

In accordance with the Executive Bureau decision number 1/97 of 15
October 2000, which set the award topic for 2002 as “The Future of Methyl
Tertiary Butyl Ether (MTBE) and How It Compares with Other Octane
Enhancing Oxygenates”, OAPEC’s General Secretariat continued to
announce the topic and informed the relevant authorities since January
2001.
It continued to advertise it in its monthly bulletins and quarterly
journal and on its website until the end of May 2002, which was the
deadline for receiving research works.
Ten research works were submitted to the General Secretariat as
follows; 3 from Algeria, 3 from Iraq, 1 from Kuwait, 2 from Egypt, 1 from
Sudan.
In accordance with article 11 of the Executive Bureau decision

number 1/55 relating to granting the awards for scientific research, an
arbitration committee was formed under the chairmanship of the Secretary
General and was composed of:
Dr. Nureddin Farrag Advisor, Egyptian Petrochemical Holding Company
Dr. Jasem Besharah Director of Scientific Culture Dept., Kuwait Institute

for Scientific Research
Mr. Tayeb Ounada Expert, Oil Industry, Technical Affairs Department

OAPEC
Dr.Hussein Shareb Expert, Refining Expert, Technical Affairs

Department OAPEC
The Arbitration Committee studied the research works submitted and

compiled evaluation reports on each. The Committee held a meeting of all
members in Cairo during 15 October 2002, where the submissions were
discussed and the following decisions were adopted:
1. The First Prize of KD 5,000 was awarded to Engineer Sa’ad Allah Al

Fathi from the Republic of Iraq.
2. The Second Prize of KD 3,000 was awarded and equally divided

between three research works submitted by:
a) Mr. Omer Bakheit and Dr. Husham Lutfi from the Republic of the
Sudan;
b) Mr. Faraj Hussein Al Maqsabi and Mr. Moufid Belmerad Ben
Lemrabet from Libya;
c) Dr. Hamdi Abou el-Naga from the Arab Republic of Egypt.
- Selecting the Topic of the OAPEC Award for Scientific Research 2004
The Executive Bureau in its 103rd meeting in Cairo during 12-13
October 2002 selected the topic for the 2004 Award as “Activation of
Mature Fields and Boosting their Productivity”.
The topic was announced in December 2002. 31 May 2004 was set as
the deadline for receiving the research works.
V. SUPPORTING ACTIVITIES
1. Media Activities
The General Secretariat continued its media activities in the following
areas:
1-1 Editing, Printing, Publishing and Distribution
The General Secretariat continued to publish OAPEC’s books and

periodicals. This involved editing, proofreading, translation, design,
printing, publishing, and distribution. Table (5-1) lists the books and
periodicals published by the General Secretariat and the number of copies
printed and distributed in 2002.
1-2 Press and Media
The General Secretariat issued several press releases covering OAPEC

activities such as the meetings of the Ministerial Council and the Executive
Bureau. Several local and Arab newspapers reported OAPEC activities, its
role in promoting coordination among member countries, and its support
for joint Arab action against a background of changing Arab and
international circumstances.
The General Secretariat continued to monitor energy affairs as
reported by the local press and some international newspapers, to collect the
most important news items relating to oil, economics, the environment, and
other topics of general interest to member countries.
1-3 Twenty-sixth Arab Book Fair

The General Secretariat participated in the 27th Arab Book Fair, which
was held in Kuwait during 17-27 December 2002 under the patronage of
the General Secretariat of Kuwait’s National Council for Culture, Arts and
Letters.
Some 616 publishing houses from 12 Arab countries and 11 non-Arab
countries took part in the fair, in addition to 10 Arab organizations,
including the Arab Centre for Health Documents and Publications
(Kuwait), the Arab Centre for Educational Research in the Gulf States
(Kuwait), the Euro-Arab Studies Centre (France), the Centre for
Manuscripts, Heritage, and Documents (Kuwait), the General Federation of
Arab Publishers (Lebanon), the Kuwaiti Red Crescent Society (Kuwait),
Supporting Activities 183
Arab League Education, Science, and Culture Organization, and the

Organization of Arab Petroleum Exporting Countries.
This year some 13,868 titles and books were on display. OAPEC’s
General Secretariat contributed with a number of books, annual reports, and
seminar and conference proceedings totalling 23 titles.
2. Administrative and Financial Activities
2-1 Evolution of the Administrative Structure

At the end of 2002, there were 53 employees at the General
Secretariat, of whom 21 were professional staff and 32 general staff. Table
(5-2) shows the number of staff at the General Secretariat in the period
1968-2002.
2-2 Evolution of Expenditure

The General Secretariat’s expenditure in 2002 totalled KD1,414,368.
Table (5-3) shows the evolution of the General Secretariat’s actual
expenditure in 1968-2002.
184 Tables
Table 5-1
Publications Issued and Distributed by
the General Secretariat in 2002
Total
Total Copies
No.of No.of Copies
Title of Publications Copies Distri-
Editions Copies Distri-
Printed buted
buted
Periodicals
- OAPEC Secretary General’s Annual Report 2001 (Arabic) 1 1500 1500 650 650
- OAPEC Secretary General’s Annual Report 2001 (English) 1 750 750 550 550
- OAPEC Annual Statistical Report 2002 1 300 300 100 200
- OAPEC Monthly Bulletin
Arabic (1-12) 11 800 8800 650 7150
English (1-12) 11 750 8250 450 4950
- Oil and Arab Cooperation; issues (100-104) 4 800 3200 500 2000
- Energy Resources Monitor – Arab and International 4 400 1600 375 1500
Books
- Proceedings of the 7th Arab Energy Conference 1 200 200 50 50

Tables 185
Table 5-2
General Secretariat Employees, 1968-2002
Year Professional Staff General Staff Total
1968 4 7 11
1969 10 14 24
1970 12 22 34
1971 10 23 33
1972 9 24 33
1973 11 23 34
1974 15 33 48
1975 31 48 79
1976 37 58 95
1977 40 70 110
1978 41 71 112
1979 45 79 124
1980 51 81 132
1981 47 87 134
1982 44 90 134
1983 51 88 139
1984 49 86 135
1985 50 82 132
1986 43 75 118
1987 24 51 75
1988 18 43 61
1989 23 39 62
1990 23 41 64
1991 22 39 61
1992 21 36 57
1993 22 33 55
1994 21 28 49
1995 21 29 50
1996 21 30 51
1997 19 32 51
1998 20 30 50
1999 17 36 53
2000 22 29 51
2001 21 31 52
2002 21 32 53
186 Tables
Table 5-3
General Secretariat Actual Expenditure by Budget Category,
1968-2002
(Thousand Kuwaiti dinars)
Wages & General Studies, Training &

Year Total
Salaries Expenditure Information
1968 9 18 - 27
1969 67 52 18 137
1970 97 75 55 227
1971 107 50 25 182
1972 126 63 17 206
1973 108 66 230 404
1974 152 140 50 342
1975 343 335 81 759
1976 525 306 434 1265
1977 694 329 367 1390
1978 807 335 467 1609
1979 929 401 432 1762
1980 1133 415 437 1985
1981 1277 461 559 2297
1982 1546 527 588 2661
1983 1763 547 634 2944
1984 1812 515 508 2835
1985 1818 447 422 2687
1986 1697 413 286 2396
1987 1439 385 190 2014
1988 799 244 122 1165
1989 733 242 145 1120
1990 771 250 141 1162
1991 693 276 87 1056
1992 734 322 114 1170
1993 765 327 118 1210
1994 718 282 127 1127
1995 709 380 140 1229
1996 725 370 140 1235
1997 725 374 148 1247
1998 735 385 140 1260
1999 712 397 127 1236
2000 799 394 138 1331
2001 886 384 141 1411
2002 885 383 146 1414
Total 27,838 10,890 7,774 46,502
AMPTC 187
CHAPTER THREE
OAPEC-SPONSORED VENTURES
OAPEC’s sponsored ventures are striving to develop their activities
using their own resources. Some of them have encountered difficult
circumstances owing to the problems of the previous years which relate to
the regional and international situation and the nature of their business.
Some face strong competition from major international companies while
others such as the Arab Shipbuilding and Repair Yard Company and the
Arab Petroleum Services Company have experienced problems entering the
Arab market, and is no doubt that the international developments witnessed
in 2001 and 2002 have placed an immense adverse impact on OAPEC’s
sponsored ventures, particularly by limiting the opportunities for
international funding and raising the element of risk for Arab institutions.
This had resulted in the postponement of several major projects.
In spite of this, some of these companies were able to overcome and
achieve tangible and satisfactory results. 2002 has marked an increase in the
level of cooperation and coordination among OAPEC-sponsored
companies, both in terms of project execution and financial and technical
support. The companies recognize that the decisions relating to their
activities lie within the competence of their general assemblies and board of
directors. They nevertheless hope for more support from OAPEC member
countries, especially when it comes to entering Arab markets on a
competitive footing, if not preferential basis.
The activities of each venture are summarized below.
I. THE ARAB MARITIME PETROLEUM TRANSPORT

COMPANY (AMPTC)
The Arab Maritime Petroleum Transport Company (AMPTC) was
established in Kuwait on 7 January 1973, with an authorized and paid-up
capital of $500 million. The objectives of the company are to own, operate
and charter a fleet of crude oil and oil product tankers. Owing to difficult
market conditions, the Company’s activities were curtailed in the 1980s,
and its authorized and paid-up capitals were reduced to $200 million and
$150 million, respectively.
The latest activities of AMPTC were summarized as follows:

188 OAPEC-Sponsored Ventures
AMPTC is preparing to take delivery of two new oil tankers to its

fleet of crude oil, liquefied gas, and light oil product tankers in the first half
of 2003. The first tanker, named M/T Zirku will be delivered on 12 April
2003, and the second named M/T Alboom will be delivered in June 2003.
AMPTC was able to adapt to the market volatility and to sustain
commercial operational levels of its fleet with oil companies via time
charter contracts, spot voyage charter and bare boat agreements. This made
it possible for the company to cover its expenses despite the sluggish
economic conditions witnessed in 2001-2002. AMPTC’s prompt adoption
of policies and full implementation to all regulations and requirements
sanctioned by the International Maritime Organization (IMO) and other
organizations, both on board fleet units and in its offices enabled the
company to establish its presence and maintain its good reputation with the
biggest maritime transport companies. This enabled the company to achieve
more operational opportunities and improve its financial status.
AMPTC was accepted as a member of the pool created by the big
companies, which pursued strict policies to reduce leasing rates of old
tankers so as to facilitate the operation of new tankers in the market.
Accordingly, the Company was able to operate some of its tankers as a
result of this membership.
AMPTC owns the following; two crude oil tankers; “Zalaq” built in
2001 and “Al Dawha” built in 1997, 153,000 tons dwt, and both operating
in the free markets under the Spot Voyage system (Spot Market). Four
liquefied gas carriers; LPG/C “Al-Berry” and “Al-Bida” both built in 1997,
size 75,000 cbm. In execution to the Board of Directors’ decision dated
6/10/2001, those two vessels were delivered to Trafiguara company under
Bare Boat agreement for a period of 3 years. LPG/C “Umm Shaif” built in
1991, size 3,200 cbm and performing time charter contract with the Danish
company L. Kosan, and LPG/C “Aisha” built in 1991, size 3,200 cbm.,
which operates most of the time under short time charter contracts with the
national oil company NOC (Lybia). The company also owns four clean
petroleum products tankers; M/T “Das” 7,287 metric ton dwt, built in 1985.
This vessel is on time contract under a bare boat charter, for a long
period, with ENOC/Dubai, UAE; M/T “El Fateh” 6,818 metric ton dwt,
built in 1981. This vessel is on time contract under a bare boat charter, for 3
years with ENOC/Dubai, UAE. M/T “Shaybah” 47,815 metric ton dwt.
built in 1998. This vessel is performing its time contract under a bare boat
charter with the aforementioned UAE company. M/T “Al Bahah” 47,204
metric ton dwt, built in 1998. This vessel is performing its time contract
under a bare boat charter with Vela (Saudi Arabia) for a long period.
ASRY 189
The Company worked in 2001-2002 on adopting a new activity by

chartering-in different types and sizes of tankers that are not available
among its fleet, and then chartering them out to other companies, the matter
which realized additional revenues.
Net profit of the Company for 2001 amounted to $2.590 million. The
actual revenues for 2001 resulting from chartering the Company’s oil
tankers amounted to $46.241 million, while the operating cost of the oil
tankers, excluding depreciation, was $21.079. Gross profit of fleet
operation, after depreciation, was $10.143 million. While the total
chartering activity and re-chartering in the world markets were $419
thousand. The other non-operational revenues reached $618 thousand till
the end of December 2001.
Administrative and general expenses for the year 2001 amounted to

$4.841 million, and expenses not related to operating the tankers and
concerning the interest on loans amounted to $3.686 million.
As for the activities of the company for the first half of 2002, the
company followed a volunteering and selective system with regard to
operational systems which supercedes the international and regional
requirements on environment conservation and the human safety. The
outcome of the financial results of the first half of 2002 corresponded with
the estimated budget which was surrounding the maritime transport
markets.
II. THE ARAB SHIPBUILDING AND REPAIR YARD

COMPANY (ASRY)
The Arab Shipbuilding and Repair Yard Company (ASRY) was
established on 1st December 1974, with a fully paid-up capital of $340
million. With the aim of building and operating a well-equipped and
efficient repair yard, which would be large enough to accommodate the
VLCCs and ULCCs serving the Arabian Gulf oil terminals. The
headquarters of the company was located at Al-Hadd, Bahrain.
The Board of Directors of Arab Shipbuilding and Repair Yard

Company (ASRY) held its 93rd meeting on 30th October 2002 under the
chairmanship of H.E. Eid Abdulla Yousif, Chairman of the Board. The
meeting was attended by representatives of the shareholding countries. The
Board reviewed the company’s results for the previous ten months as ship
repair sales research US $76.5 million compared to US $68.555 million for
the same period of 2001 where the income had surged to a record level
exceeding the 2000’s income by 45%. 91 vessels were repaired or booked

for repair most of which were very large crude carriers compared to 84
vessels for the same period of 2001.
The Board approved the estimated budget for 2003, which anticipated
repairing 125 vessels, and decided to continue its support for the training
and Arabisation programmes. The Board also reviewed a number of
proposals and information related to administrative, marketing and
technical matters. They also were briefed on plans for continuous
improvement.
The company managed to achieve a tangible improvement in its 2002
operations in spite of the harsh competition which it faced by other docks
and the drop in vessels repair charges, in addition to the international
political situation witnessed in 2001-2002 which had a drastic impact on the
international economy in general and on the ship repair activities in
particular.
The years 2001-2002 were of many challenges for ASRY. It
witnessed numerous successes as it was granted an international award for
quality assurance and another for excellence and innovation on completion
of one of the largest conversion contracts ever undertaken by the yard. The
year commenced and ended with a crowded agenda for the three docks. All
this was achieved despite the latest world crisis of the September 11 events
in New-York which lead to slow down of work until the end of 2001.
However, due to ASRY’s prompt adoption of policies such as offering low
insurance charges to its customers which outspread an atmosphere of
confidence giving the company a further push forward. The Company
managed to repair 104 ships (35 of those were from Arab markets and 69
from World markets) on the three repair docks and the connecting pier. The
net profit from the Arab market reached $30 million, for repairing 16 ships
from the Kingdom of Saudi Arabia for $15 million, 2 ships from the State
of Kuwait for $4 million, 5 ships from the State of Qatar for $3.7 million, 3
ships from UAE for $1.8 million, 7 ships from the Kingdom of Bahrain for
$2.3 million, one ship from Marrakech for $2.7 million.
Of the total ships being repaired, 93 ships were repaired using the
graving and floating docks, the other 11 ships were repaired alongside. Of
these 18 vessels weighed over 175,000 dwt. with a 63% increase compared
to 2000, 17 vessels were in the 70,000 to 175,000 dwt range, with a 70%
increase compared to 2000. Accordingly, ASRY has managed to reach high
rates of dock occupancy, reaching 96.99% in the Graving Dock No 1 up
14% to the previous year, and achieving 86.57% and 92.05% occupancy for
Floating Dock No 2 and No 3 respectively.
APICORP 191
ASRY continued in 2001-2002 in implementing its plans to develop

the Arab employees. These plans included; increasing the number of Arab
trainees, improving efficiency, elevating the employee’s skills and
promotion. The Arab trainees follow a condensed training program where
they will later replace the foreign employees which have completed their
contract period. The rate of Arabization reached 58.3%. ASRY also
arranged a variety of senior and middle managerial and supervision courses
and arranged courses for professional and general Arab employees reaching
122 different programs which incorporated 1073 staff members. ASRY has
a total of 1202 permanent staff members, 701 of those are of Arab
nationality, as well as 222 temporary employees working according to the
work needs. The company also uses a number of subcontractors in the high
seasons.
One of ASRY’s major repairs in the first half of 2002 was the giant
“Stena King” vessel which weighs 458 dwt, and the Singapore’s World
Prelude which had undergone major blasting and painting works. In
addition to three large vessels from the Kuwait Oil Tanker Company and
three other from the Saudi Feela Company under an inclusive contract to
repair a number of tankers during this year, and repairing three drilling
platforms for the Saudi Aramco Company.
III. THE ARAB PETROLEUM INVESTMENTS

CORPORATION (APICORP)
The Arab Petroleum Investments Corporation (Apicorp) was
established in Khobar, Saudi Arabia, on 23 November 1975 with an
authorized capital of $1200 million (issued and fully paid-up capital
amounted to $460 million, divided into 460,000 shares of $1,000 each).
The latest activities of Apicorp during 2001-2002 were summarized as
follows:
The Board of Directors of the Arab Petroleum Investments
Corporation (Apicorp) held its 4th and final meeting for the year 2002, on
22 December in Cairo, Egypt. The Board reviewed the items on the agenda
which included the periodical reports related to financing oil and
petrochemical activities in the Arab world, in addition to financing Arab oil
exports which Apicorp anticipates arranging its loans along with some
local, regional and international banks. The Board reviewed the financial
statements for the period January to November 2002, and the investment
activities report for the same period. The meeting was attended by
representatives of the shareholding countries namely; UAE, Bahrain,
Algeria, Saudi Arabia, Syria, Iraq, Qatar, Kuwait, Egypt and Libya.
Apicorp, an affiliate of the Organization of Arab Petroleum Exporting

Countries (OAPEC), has announced lately its participation in a number of
finance and trade activities amounting to one billion US dollars, which were
arranged for Arab oil and petrochemical companies.
Apicorp’s Board of Directors held their 3rd meeting for the year 2002
on 16 October in Damascus, the Syrian Arab Republic. The Board reviewed
reports on the developments of the corporation’s business, including its
finance and investment activities, and the financial statements for the period
from January to September 2002.
Project and trade finance activities have been robust during the 3rd
quarter of this year, covering most countries in the Arab region, including
North Africa. This was positively reflected in the Corporation’s loan
portfolio, which totalled by the end of September 2002 US$1.067 million,
compared to US$864 million at the beginning of the year, an increase of
24%.
The Board of Directors Apicorp held a meeting on 11 April, 2002 in

Cairo. The General Assembly approved the 26th Annual Report and the
audited financial statements for 2001. The financial statements disclosed
that net profit for the year was $42.8 million, compared to $40.4 million in
the year 2000. The General Assembly endorsed the Board of Directors
recommendation for the distribution of $30 million as cash dividends to the
shareholders for the year 2001.
APICORP maintained its position in the project finance markets
during 2001, where it successfully concluded 16 new financing transactions
totaling $4.3 billion and achieved a final take of $463 million. The major
loans were; $400 million for the Qatar Fertiliser Company (QAFCO), the
$900 million for Equate Petrochemical Company, $1.3 million for Oman
LNG, the $280 million for the Saudi Polyolefin Company, the $104
million for the Egyptian Natural Gas Company (GASCO) and $50 million
for Sonatrach in Algeria.
During the first nine months of 2002, APICORP participated in
project and trade finance loans totalling more than US$4 billion, arranged
for:
The Saudi Basic Industries Corporation (SABIC), Oman India
Fertiliser Company (OMIFCO), Al-Jubail Fertiliser Company (SAMAD),
Al-Jubail United Fertiliser Company, Holborn Europa Raffinerie Gmbh,
Abu-Qir Fertiliser Company, in addition to oil exports to companies in
Korea and South East Asia.
APICORP 193
APICORP’s strategies depend on the participating in arranging the

necessary finance for petroleum and petrochemical projects, and is
constantly striving in the effective participation in the appropriate and
economically rewarding investment opportunities in the field of industry
and its refined oil products.
APICORP holds equity share interests of the eleven Arab joint
ventures. These projects are located in Saudi Arabia, Bahrain, Libya, Syria,
Iraq, Egypt, Tunisia and Jordan, and operate in the fields of basic
petrochemicals, liquefied petroleum gas, drilling and work over services,
chemical fertilizers, carbon black and industrial fibers.
APICORP did not participate in any new capital projects during 2001
and the first half of 2002. The main task during that phase was to intensify
the follow-up of the efficiency of the already established projects with the
objective of increasing the income and supporting its competitive abilities
during these difficult exclusive situations which the oil and petrochemical
industry faces during this period. In addition to the follow-up of the course
of work in the projects which are under construction, in order to complete
their construction within the planed time frame cost.
The major achievements of APICORP during the aforementioned
period was; increasing the Saudi Ibn- Zahar poly propylene production line
to 320 thousand tons/year and the inauguration of a new production line
with a similar capacity to reach a total production capacity of 640 thousand
tons/year, as well as the commencement of the commercial production of
the Egyptian fertilizers company on the first of January 2001 with a
capacity of 1396 thousand tons/year and a Urea production capacity of 577
thousand tons/year.
In addition to the success of the production trial of the Sharquon

petrochemicals in mid 2001 and the commencement of the commercial
production on the 1st of January 2002 with a production capacity of 120
thousand tons/year of poly propylene.
In December 2001, the Jordanian Phosphate Mining Company

restructured its capital from JD65 million to JD75 million. In addition in
May 2002 the Saudi Ibn Rushd Company managed to start the trial
production of the perfume firm which reaches 725 thousand tons/year after
its intermission during 2001 for technical reasons.
APICORP continued to promote crude oil exports from the area,
where it participated in a number of financing investment operations during
2001 reaching around $929 million, with a net profit reaching $129 million.
2001 was the start of APICORP’s participation in the financing investment
energy activities. In addition it established a cooperation agreement with
Taylor-DeJongh of the USA to provide financial advice to the oil and

petrochemical industries as well as energy projects and general institution
in the area.
One of the companies in which Apicorp holds shares is Aradet.
1. Arab Company for Detergent Chemicals (ARADET)
The Arab Company for Detergent Chemical (Aradet) was established

in Iraq on 12 March 1981, headquarters in Bagdad, with an authorized
capital of 72 million Iraqi dinars (ID), a subscribed capital of ID60 million,
and a paid-up capital of ID36 million. Equity in the company is held by Iraq
(32%), Apicorp (32%), Saudi Petromin Corporation (10%), Kuwait’s
Petrochemical Industries Company (10%), the Arab Mining Company
(10%), and the Arab Investment Company (6%).
The continued economic sanctions against Iraq had a severe impact on

all the company’s activities. The major problems and obstacles were: the
continued restrictions imposed on importing raw materials and spare parts
and on exporting the company’s products; the freezing of the company’s
money and deposits in banks abroad, including banks operating in the Arab
states; the suspension of work on major projects, in particular the tertiary
multiphosphate sodium project, and the sharp escalation of local
commodity and service prices.
Nevertheless, Aradet’s linear alkyl benzene (LAB) production line

remained in operation all the year and resuming work in the tertiary
multiphosphate sodium project (STPP).
In terms of production, Aradet’s LAB production totaled 36,605 tons

in 2001, and was 41,847 tons in 2000, or 5,242 tons less. Its toluene
production totaled 4,047 tons in 2001, and was 5,318 tons in 2000, or 1,271
tons less.
The Company’s financial statements showed that it produced a net

profit of ID1.343 million in 2001 compared to ID956 in 2000. The
statements also show that the company produced a net profit of ID695
million in the first half of 2001.
APSCO 195
IV. THE ARAB PETROLEUM SERVICES

COMPANY (APSCO)
The Arab Petroleum Services Company (Apsco) was established on

8 January 1977 as a holding company based in Tripoli, Libya, with an
authorized capital of 100 million Libyan dinars (LD), and subscribed and
paid-up capital of LD15 million. Apsco is the sole owner of the Arab Well
Logging Company (Awlco), and is a 40% shareholder in both the Arab
Drilling and Workover Company (Adwoc) and the Arab Geophysical
Exploration Services Company (Agesco).
The company continued its activities in two parallel trends, the first
focused on setting up a joint well logging company in Libya. Many
international companies manufacturing the logging equipment were
approached with no luck until now. Therefore, the company is in the
process of exploring other oil sector projects.
The second trend focused on supporting and monitoring its three
subsidiary companies which are: Arab Drilling and Workover Company
(ADWOC), Arab Well Logging Company (AWLCO) and the Arab
Geophysical Exploration Services Company (AGESCO).
The activities of the subsidiary companies are described below:
1. Arab Drilling and Workover Company (ADWOC)

Adwoc was established in Tripoli, Libya, in February 1980 with an
authorized and paid-up capital of LDl2 million.
Adwoc’s Board of Directors held an ordinary meeting in Tunis on
26/12/2002. The Board discussed and approved the minutes of its 81st and
82nd meetings held in Cairo on 11 October 2002. This followed reviewing
the company’s financial results for the period 1 January to 30 September
2002.
Net profits during the same period amounted to LD17,674,755
(seventeen million, six hundred and seventy-four thousand, seven hundred
and fifty-five Libyan dinars), or US$13,502,487 (thirteen million, five
hundred and two thousand, four hundred and eighty-seven US dollars). The
operation rates were 90% for Libya and 100% for Syria. The Board also
reviewed a request from the management to invest the surplus in local
currency in a fixed term deposit in a bank operating in Libya.
Adwoc is currently holding talks with several companies specialized

in oil equipment manufacture and marketing in order to enter into
cooperation or sharing agreements so as to acquire the latest drilling
technology and related services. The company accomplished progress
during the first six months of 2002, in the drilling and maintenance
activities, operating at 91% capacity. The company also purchased and
installed a top drive for rig number 3, as well as a 750-HP workover rig
after the Board’s approval and as agreed with Agip Gas company. As a
result, Adwoc owns two workover rigs in Libya and Syria, which resulted
in a key step in applying advanced technology in the field of drilling.
The company’s net profit reached $8,797,685.00 from 1st January-30th
June 2002 for its operations in Libya and Syria compared to $4,688,000.00
of the expected profit within the estimated budget, which was 88% better
than had been planned.
The engineering services witnessed strong recovery during the first six
months of 2002, achieving a profit of $2,177,080.00 or an average income
of $12,028.00 per day. This is around 13% higher than the estimated budget
for 2002. This progress is attributable to renovating some equipment in this
department and consequently led to the increase of service demand. To
support this positive trend Adwoc continues to negotiate and communicate
with foreign services companies in search for cooperation opportunities
with regard to implementing some services which provides the transfer of
advanced technology in the field of drilling particularly horizontal drilling.
2. Arab Well Logging Company (AWLCO)

Awlco was established in Baghdad, Iraq, on 24 March 1983 with an
authorized capital of 7 million Iraqi dinars and a paid-up capital of ID6.760
million. In 1983, APSCO invested its entire capital of Awloc of $22.5
million, which is equivalent to 45% of APSCO’s capital of LD15 million.
The company did not collect any of its profits during the 17 years of the
company’s establishment (1985-2001).
The company’s balance sheet as of 31/12/2001 indicated that the
Northern And Southern Oil Company’s debts reached $38 million inclusive
of 5% interest for post-paid debts which reached $12.9 million. The total
technical aid as of 31/12/2001 reached $1.2 million. The evaluation results
presented to the Board of Directors on 30/6/2002 necessitated the formation
of a committee of the Board of Directors to investigate and work together
with the Iraqi ministry of oil to register these debts, so as to secure the
company’s capital of $22.5 million.
APSCO 197
The economic sanctions caused a slump in work capacity which

resulted in the drop in income compared to the previous period. The
company’s total income reached $3,580,815 or ID614,559,773. Cash and
non-cash expenses reached $803,446 or ID261,341,644 for the same period.
Thus, the net profit for 2001 was $2,777,369 or ID353,218,129.
3. The Arab Geophysical Exploration Services Company

(AGESCO)
The Arab Geophysical Exploration Services Company (Agesco) was
established in Tripoli, Libya, in 1984 with an authorized capital of 12
million Libyan dinars and a paid-up capital of LD4 million.
AGESCO third crew finished seismic surveying operations for Sirte
Oil and Gas Company at concession MN151 Al-atshan at the end of
January 2001. Where it achieved 128.30 2D km., 240 recording stations, 25
meters length of station. In February and April 2001, it was transferred to
Widan for maintenance and renewal where the crew was using state-of-the-
art recording devices UL408 and AMGP23.
Agesco’s third crew finished a 2D seismic survey program for Sirte
Oil and Gas Company covering 818.01 km for different parts of concession
no. 6 to undertake seismic operations for each of these fields, Somoud,
Sahel, Al-laheeb, south hill, Makeel, these operations started 28 May 2001.
The crew was awarded the contract for Sirte Oil and Gas Company
covering 213.75 km south of Raquoba concession no. 6. The crew covered
843.8 km during the last nine months of 2001, and 316.3 km during the first
quarter of 2002. The fourth crew had resumed its seismic survey program at
concession MC187 belonging to Ramsa Company using 2D seismic
program on a 300 channel system. By the end of April, the company
achieved 454.32 km.
In May 2001, the crew transferred to work with Rispol Company on a
contract at NC115 concession to conduct a seismic survey of 850 km using
a 2D program. The crew arrived on 19 May and commenced work on 21 of
the same month. The crew had completed its work on 23 November 2001
covering 874.88 km. The total area covered was 1329.2 km using 2D
seismic program within 11 months. The fifth crew was awarded a joint
contract for Geosystem and Agesco companies for four months for Rasma
Company to conduct a gravity seismic survey at “MN186 and 190”
concessions. The contract stipulated that Agesco provides supplies and
seismic topographic equipment. The Geosystem Company on the other
hand will provide the technicians and the gravity equipment.
198 Appendices
APPENDICES
I. PRESS RELEASES OF OAPEC MINISTERIAL COUNCIL

MEETINGS IN 2002
- The Sixty-eighth Meeting of OAPEC Ministerial Council

OAPEC’s Council of Ministers convened its sixty-eighth meeting in
Cairo on June 10th 2002. The meeting was at the level of the Executive
Bureau Members representing their Excellencies the ministers and was
chaired by H.E. Mohammed Meziane representative of the People’s
Democratic Republic of Algeria, who chaired the Session.
The Council approved the final accounts of the General Secretariat

and the Judicial Tribunal for the year 2001, and re-appointed the auditors
for the year 2002. The Council reviewed the Secretariat’s activities since its
last meeting commending OAPEC’s efforts for convening the 7th Arab
Energy Conference during 11-14 May 2002 and reviewed the studies it
carried out and took note of the preparations for the seminars the Secretariat
will convene during the current year.
The Council concluded by expressing its appreciation to the Arab

Republic of Egypt for all the facilities provided which were conducive to
the success of the meeting.
- The Sixty-ninth Meeting of the Ministerial Council

The OAPEC Ministerial Council held its sixty-ninth Meeting on
21 December 2002 in Cairo – Egypt. The meeting was chaired by H.E.
Dr. Chakib Khelil, Minister of Energy and Mines in the People’s
Democratic Republic of Algeria, which has the chair for the current session.
H.E. the Chairman welcomed their Excellencies the Ministers and

expressed the Council’s appreciation to the Arab Republic of Egypt for the
gracious hospitality, emphasizing the importance of cooperation among
member countries to achieve the Organization’s objectives. He referred to
the current situation at the oil market which showed remarkable
improvement. He called for cooperation between producers and consumers
to achieve market stability and fair prices.
Appendices 199
He was followed by H.E. Abdul Aziz Al Turki, the Secretary General

of OAPEC, who also welcomed their Excellencies the ministers wishing
them success in their deliberations and anticipating their support for the
Organization’s activities.
After approving the agenda of the meeting the Council:
- Approved the 2003 budget of OAPEC (The General Secretariat and the
Judicial Tribunal) amounting to KD1,629,250.
- Reviewed a report on the 7th Arab Energy Conference which was held in
Cairo during the period 11-14 May 2002 emphasizing the importance of
its recommendations.
- Received the decision of the Arbitration Panel of the 2002 OAPEC
Award for Scientific Research on papers addressing the topic of: “The
Future of Methyl Tertiary Butyl Ether (MTBE) and How It Compares
with Other Octane Enhancing Oxygenates” and announced the names of
prize winners: The First Prize, amounting to K.D.5,000 was awarded to
Engineer Sa’ad Allah Al Fathi from the Republic of Iraq. The Second
Prize, amounting to K.D.3,000 was awarded and divided between; Mr.
Omer Bakheit and Dr. Husham Lutfi from the Republic of the Sudan,
Mr. Faraj Hussein Al Maqsabi and Mr. Moufid Belmerad Ben
Lembrabet from the Algerian Democratic and Popular Republic, and to
Dr. Hamdi Abou el-Naja from the Arab Republic of Egypt.
- Reviewed memoranda reviewing the progress in OAPEC Data Bank,
monitoring the issue of environment, the participation and organisation
of technical meetings as well as the preparation of studies.
- Reviewed a report on OAPEC – sponsored ventures activities, and took
note of the thirty-first meeting of the officials of these ventures and the
Organization’s General Secretariat. As for the Arab Petroleum Training
Institute, the Council resolved to extend the period during which the
Republic of Iraq is entrusted to sponsor the Institute for one year
effective 1st January 2003.
- Agreed to convene the next Ministerial Meeting in Cairo on 13/12/ 2003.
Expressed profound appreciation to the President, government and
people the Arab Republic of Egypt, for hospitality and generosity, and
perfect preparation, which was conducive to the success of the meeting.
- Forwarded a message of appreciation to His Excellency Mohamed Hosni
Mubarak, the President of the Arab Republic of Egypt, for hospitality
and support.
200 Appendices
II. MEETINGS AND SEMINARS SPONSORED OR

ATTENDED BY THE GENERAL SECRETARIAT,2002
Title Venue Date

January
- Preliminary Meeting on Unified Arab Economic Cairo 21-23
Report
- Sixth Meeting of Exports from Energy Exporting and Abu Dhabi 28-29
Importing Countries
February
- 69th Session of the Economic and Social Council Cairo 11-12
March
- Seminar on the Repercussions of the World Trade
Accords on the Industrial Sector in the GCC States Doha 11
- First Conference on Developing Gas Markets in the
Arabian Gulf Area Abu Dhabi 18-19
- Third European Fuel Conference Paris 18-20
April
- First Syrian Oil and Gas Damascus 2-4
- Meeting of Board of Trustees of Oxford Institute Oxford 26
- Meeting of Oxford Club Oxford 27
May
- Seventh Arab Energy Conference Cairo 11-14
- Seminar on Oil Spills and Control Kuwait 18
- 28th Meeting of the Executive Bureau of the Council of
Arab Ministers Responsible for the Environmental Damascus 21-23
June
- Experts’ Meeting on the Results of the Fourth
Ministerial Conference of the World Trade
Organization and Preparation for the Forthcoming Beirut 5-6
Negotiations
- 102nd Meeting of OAPEC’s Executive Bureau Cairo 8-9
- 68th Meeting of OAPEC’s Ministerial Council Cairo 10
- Meeting of the Organizations Participating in the
Preparation of the Unified Arab Economic Report Abu Dhabi 23-27
- “The Future of Natural Gas” Seminar Paris 25-27
Appendices 201
Title Venue Date

July
- The Supreme Coordination Committee For Joint Arab
Action Alexandria 3-4
- Oil, Energy and Gas Conference: Prospects of the
Near East Region Geneva 8-9
- The High-Ranking Arab Officials’ Meeting to Prepare
for Participating in the World Summit for Sustainable
Development Cairo 30-31
September
- Oxford Energy Seminar Oxford 2-12
- The 70th Session of the Economic and Social Council Cairo 9-10
- The Eighth International Energy Forum Japan 21-23
October
- Second Expert Meeting on Potential Cooperation in
Natural Gas Industry Cairo 1-2
- 9th Coordination Meeting of Environment Experts Cairo 5-6
- Coordination Meeting of OAPEC-Sponsored Ventures Cairo 8
- 103rd Meeting of OAPEC’s Executive Bureau Cairo 12-13
- The 10th Abu Dhabi International Petroleum
Exhibition and Conference Abu Dhabi 13-16
- Expert Group Meeting on Building Skills and
Regional Integration to Develop the Sustainable Beirut 15-17
Energy Sector
- OAPEC’s Scientific Research Award 2002 Cairo 15-16
- The 14th Session of the Council of Arab Ministers
Responsible for Environmental Affairs and it’s Sharm El- 20-21
Executive Bureau Sheikh
- The 8th Session of the Conference of the Parties India 23/10-1/11

202 Appendices
Title Venue Date

December
- Brainstorming Meeting of Oxford Institute Oxford 9-10
- Meeting of Oxford Club Oxford 10
- Preparatory Meeting to Discuss the Draft Abu Dhabi
Declaration on the Environment and Energy Abu Dhabi 14
- 104th Meeting of OAPEC’s Executive Bureau Cairo 18-19
- 69th Meeting of OAPEC’s Ministerial Council Cairo 21
- The Unified Arab Economic Report Kuwait 24-26

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______________________________________________________________________________

THE MINISTERIAL COUNCIL

H.E. Dr. Chakib Khelil People’s Democratic

H.E. Shaikh Issa bin Ali Al Khalifa Kingdom of Bahrain

H.E. Eng. Samih Samir Fahmy Arab Republic of Egypt

H.E. Dr. Amer Mohammed Rasheed Republic of Iraq

H.E. Dr. Abdul Hafeez M. Al-Zulaitni Great Socialist People’s

H.E. Abdullah bin Hamad Al-Attiyah State of Qatar

H.E. Eng. Ali bin Ibrahim Al-Naimi Kingdom of Saudi Arabia

H.E. Dr. Ibrahim Haddad Syrian Arab Republic

H.E. Obeid bin Seif Al-Nasseri United Arab Emirates

* Succeeded H.E. Dr. Khalid Adel Al Subaih in February 2002.

THE EXECUTIVE BUREAU

Mr. Mohammed Meziane People’s Democratic

Mr. Rashed Hassan Al-Dhubaib Kingdom of Bahrain

Mr. Sherif Ismail Mohammad Arab Republic of Egypt

Mr. Kamil Ja’afar Oudah Republic of Iraq

Mr. Abbas Ali Naqi State of Kuwait

Mr. Fathi Mohammed El-Abbar Great Socialist People’s

Mr. Salem Buti Al-Naimi State of Qatar

Dr. Khalid Mansour Al-Aqeel Kingdom of Saudi Arabia

Dr. Youssef Hossamo Syrian Arab Republic

Mr. Nasser Mohammed Al-Sharhan United Arab Emirates

THE JUDICIAL TRIBUNAL

Mr. Faris Abdul Rahman Al-Wagayan President

Mr. Mohammed Ali Al-Jady Vice-President

Dr. Moustafa Abdul Hayy Al-Sayed Member

Shaikh Abdul Rahman bin Jaber Al Member

Mr. Jawad Omar Al-Sakka Member

Dr. Nabil Abdullah El-Araby Member

Mr. Khalifa Daalouj Al-Kobaissi Member

Dr. Riad Rashad Al-Daoudi* Registrar

THE GENERAL SECRETARIAT

Mr. Abdul Aziz A. Al-Turki Secretary General

The Arab Center for Energy Studies

Mr. Mohammad Osman Al-Nijoumi Acting Director of the Information and

_____________________________ Director of the Finance and*

* The Finance and Administrative Affairs

CHAPTER ONE: DEVELOPMENTS IN GLOBAL MARKETS AND THEIR

3-1-2 Final Consumption of Natural Gas………….………………… 28

CHAPTER TWO: ARAB AND WORLD DEVELOPMENTS IN THE

CHAPTER THREE: ARAB AND WORLD DEVELOPMENTS IN PETROLEUM

CHAPTER ONE: THE MINISTERIAL COUNCIL AND THE EXECUTIVE

CHAPTER TWO: THE GENERAL SECRETARIAT

II. Arab and International Cooperation…………………………………….. 152

1. The Seventh Arab Energy Conference………………………….…..… 152

2. Seminars and Meetings Organized by General Secretariat…….…. 165

3. Conferences, Seminars and Meetings Attended by the General

3-1 The Economic and Social Council Session; Follow-up of the

4. The Unified Arab Economic Report…………….…………………… 179

III. Energy Resources Monitor-Arab and International…………………… 180

CHAPTER THREE: OAPEC-SPONSORED VENTURES

I. The Arab Maritime Petroleum Transport Company.......………........ 187

I. Press Releases of OAPEC Ministerial Council Meetings in 2002……. 198

1-1 OPEC Production After Quota Reductions in 2002 ……………….. 36

1-23 Hydroelectricity Consumption in OAPEC Member Countries,

2-1 Seismic Surveys in OAPEC Members and Other Arab Countries,

3-6 Share of Natural Gas in the Total Consumption of Commercial

2-13 Oil Production in OAPEC and OPEC Member Countries,1998-

3-1 World Primary Distillation Capacity by Region, 2002…………… 104

At the time of publishing this 2002 Report, the Arab region is

It gives me pleasure to present this Report, which reviews Arab and

Part One of the Report looks at international developments in oil and

Also included in Part One are Arab and international development in