Arab Refining Projects Face Delay: OAPEC

New oil refinery building and development projects in several Arab countries are locked in obstacles and challenges that could lead to delay or cancellation, the OAPEC said. Such challenges primarily involve uncertainty over future rates of demand for oil derivatives at global markets, something which complicates efforts to estimate the economic risks of investment projects, the Kuwait-based Organization of the Arab Petroleum Exporting Countries (OAPEC) said in its monthly report.

The second challenge is the fluctuation of construction material costs, especially during the period leading up to the global financial crisis (mid-2008), resulting in a major change in initial estimates of project costs, it added. The third challenge is pressure arising from environmental protection laws that some governments and international environmental organizations seek to enact, given that it usually takes several years to consider the negative impacts of refineries on environment in some countries, the Arab oil cartel said. In spite of great efforts exerted by those who are in charge of Arab refining industry, the pace of development is very slow, it said, pointing out that this industry requires much dynamics and taking the right decision at the right time.

For long decades now, the Arab oil producing countries have been attaching much attention to oil refining industry thanks to its strategic role in the maximization of the added value of oil by exporting its as products on the one hand and fulfilling growing local demand for oil derivatives on the other hand, the organization noted. Oil refining industry began in Arab countries in 1913 when the first Arab oil refinery was opened in Egypt. - Kuwait Times