Financial Times: Oil giants bet on Gulf wealth
Waleed Mansour: The world’s largest oil companies are looking to overcome the repercussions of the ongoing war in the Middle East, which has left destruction and disruptions in production, as well as an unprecedented rise in geopolitical risks, in their pursuit to strengthen their presence in the region and seize new investment opportunities in its vast oil and gas reserves, which have long been a strategic target for Western energy giants.
The British newspaper Financial Times reported that top executives from Shell, BP, TotalEnergies, ConocoPhillips, and Chevron reaffirmed their continued desire to expand their investments in the Middle East, considering that the abundance of natural resources and low extraction costs give the region economic attractiveness that outweighs the growing risks stemming from the conflict with Iran.
The newspaper clarified that this trend reflects a growing conviction among international companies that regional disruptions, however severe, will not change the fundamental realities of the global energy market, foremost among them the fact that Middle Eastern countries hold a significant share of producible reserves at competitive costs.
Post-war opportunities: According to the Financial Times, confidence in the region’s future is expected to be renewed at the World Petroleum Congress in Riyadh, which will be attended by several top executives at the invitation of Saudi Energy Minister Prince Abdulaziz bin Salman, despite security concerns linked to the continuation of military operations.
Western companies’ objectives are not limited to reaffirming their existing relations with Gulf states; some oil groups are seeking to build new partnerships that could allow them to capitalize on the transformations brought about by the war, particularly as Arab governments reassess their international economic relations and prepare for large-scale projects to rebuild damaged facilities and develop energy infrastructure after the conflict ends.
Patrick Pouyanné, CEO of the French company TotalEnergies, said his desire to invest in all countries in the region has become stronger than ever, even if it requires building additional pipelines to transport oil away from risky maritime routes. He emphasized that the Middle East still holds the world’s lowest-cost oil, stressing the need to develop alternative export routes that reduce reliance on the Strait of Hormuz, and noting his company’s readiness to contribute to implementing such projects in Abu Dhabi, Iraq, and Syria.
Confidence in resources: Wael Sawan, CEO of Shell, expressed a similar stance during the Energy Intelligence Forum in London, voicing confidence in the ability of Middle Eastern governments to manage their strategic resources efficiently and ensure the flow of energy supplies to global markets. Sawan pointed out that the region possesses high-quality oil and gas assets managed by governments with strong institutional capacities, which enhances the prospects for sustained production and long-term investment.
For her part, Meg O’Neill, CEO of BP, affirmed that the company’s historical roots trace back to the Middle East, emphasizing the group’s pride in its long-standing relations with several countries in the region. O’Neill expressed sympathy for those affected by the war and hope for a swift resolution, confirming that the company does not intend to withdraw or distance itself from regional investment opportunities due to current developments.
The newspaper views the major investment prize for Western companies as gaining broader access to work in Saudi Arabia and the United Arab Emirates, which hold some of the world’s largest oil and gas reserves and the lowest production costs.
However, the two countries have historically maintained firm control over their most valuable oil fields through their national oil companies, imposing restrictions on foreign participation or offering relatively modest returns to international firms. Amidst vast reserves, London’s forum hosted the first public remarks by Saudi Aramco CEO Amin Nasser since the war broke out in February, providing an opportunity for direct engagement with leaders of global energy companies. Mubarak Al Kaabi, who oversees exploration and production activities at the UAE’s ADNOC, also participated in meetings with industry officials. Ashraf Ghazawi, Aramco’s head of strategy, stated that the Middle East holds 50% of global oil reserves, alongside the largest spare production capacity and resources sufficient for fifty years, as well as the lowest production costs. He emphasized the need to look beyond the current crisis, noting that the energy sector relies on long-term investments and that facts regarding reserve volumes and production competitiveness cannot be ignored when formulating future strategies. However, one executive participant at the forum pointed out a paradox: despite repeated assertions by Aramco and ADNOC of their ability to withstand crises, both companies have intensified their acquisitions of foreign assets in recent years, reflecting a growing trend toward geographic diversification of investments and reduced reliance on the region. Data presented by the Financial Times suggests that global oil companies view the war as a temporary challenge rather than a reason to abandon the region, as the Middle East’s vast reserves and low production costs remain decisive factors in investment decisions. Meanwhile, reconstruction efforts, the development of export routes, and improved contracts may open the door to a new phase of competition for the region’s oil and gas wealth.
