Energy investments in the Middle East and North Africa are expected to total $220 billion in the next five years, with Gulf producers accounting for 62 percent, Arab Petroleum Investments Corp (APICORP) said.
Arab states are forecast to spend $80 billion between 2006-2010 on the oil sector - of which $36 billion will be allocated for upstream exploration and development of new capacity as well as sustaining current output through enhanced oil recovery programmes, APICORP said in a May report.
The midstream sector would require $6 billion while spending on capacity expansion and new projects in refining was put at $38 billion.
The Middle East holds nearly half of the world's proven oil reserves and 30 percent of proven natural gas reserves.
Encouraged by a four-year oil price rally, many Gulf members of the Organisation of the Petroleum Exporting Countries (Opec) are building output capacity to keep up with global demand and investing in downstream development to diversify their economies.
Saudi-based APICORP is owned by 10 member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC). It provides funds for oil and gas related projects in Arab states.
The report estimated Arab investment in new energy projects in 2005 at $39 billion, including for petrochemicals and power.
"This level of investment is equivalent to 4 percent of Arab GDP and 18 percent of Arab gross accumulation of fixed capital for 2005," it said. "Looking forward, these investment figures are set to increase rapidly."
"The resulting cumulative investment requirements, which stands at $220 billion for the 5-year period, represents a 26 percent increase over the last APICORP's annual survey of $175 billion for the period 2005-2009."
Of the $220 billion, the gas sector would account for $103 billion - 12 percent of which will got to exploration and production of natural gas and associated natural gas liquids.
Spending on power generation was seen at $38 billion as demand rises on the back of increased urbanisation, industrial expansion and GDP growth in many states. Regional generation capacity was expected to double within the next 12-15 years.
APICORP said state oil firms would not need debt financing for upstream and midstream projects if oil prices stay strong. Some international oil companies in upstream joint ventures may tap the debt market to help finance gas expansion, it added.
For the downstream sector, projects would typically rely on 30 percent equity and 70 percent debt, the report said.
"The resulting overall capital structure for the Arab region for the period 2006-2010 would most likely be 53 percent equity amounting to $23 billion per year and 47 percent debt, amounting to $21 billion per year on average," it added.
The report covers Saudi Arabia, Qatar, Kuwait, Algeira, the United Arab Emirates, Libya, Oman, Egypt, Syria, Yemen, Bahrain, Iraq, Sudan, Tunisia, Morocco, Jordan, Lebanon and Mauritania.
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