MENA reserves up 11% from 2003

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Middle Eastern countries dominated the list of increased reserve estimates.

Proven oil reserves in the Middle East and North Africa grow to 811 billion barrels.

The Middle East and North Africa region's oil reserves have increased by 82 billion barrels over the past five years, according the Energy Information Administration (EIA).

"The reported increase in proven oil reserves of the Middle East and North Africa (MENA), from 729 billion barrels in 2003 to 811 billion barrels in 2008, dwarfs additions to reserves in the rest of the world put together over the same period, implying that oil revenue will remain the region's dominant source of foreign exchange," says Global Insight economist Bryan Plamondon.

Several MENA countries witnessed sizeable increases in their proven reserve levels during this period, including Saudi Arabia, Kuwait, Libya, and Iran. With the information about reserves controlled by these countries' respective governments, the estimates could very well overstate reserve levels and should be viewed with caution.

"Uncertainty about the true size of the region's proven reserves represents a major risk to any assessment of the region's capacity to remain the global economy's supplier of last resort," warns Plamondon.

Recent estimates released by the EIA in its 2008 World Energy Outlook report showed that the world's total proven crude oil reserves have increased by 119 billion barrels since 2003, rising from 1.21 trillion barrels to 1.33 trillion barrels in 2008. Close to 70% of this increase was attributed to rising reserve levels in the MENA region.

Indeed, MENA's proven oil reserves have grown by 82 billion barrels over the past five years, to 811 billion barrels in 2008. The bulk of this rise came from the Middle East, with four countries accounting for a 63-billlion-barrel increase in reserves.

Iran reported the biggest increase, of 49 billion barrels in oil reserves, over the period 2003-08, to 138 billion barrels.

Kuwait's proven oil reserves have grown by nearly 8 billion barrels over the last five years, leaving the Gulf state with a current level of 104 billion barrels. Saudi Arabia's oil reserves grew to 267 billion barrels in 2008, an increase of 5 billion barrels over 2003's figure, while Iraq's oil reserves increased by about 3 billion barrels, to reach a total of 115 billion barrels.

Yemen, however, witnessed fall in its proven oil reserves of 1 billion barrels in 2007.

"This is a significant decline given that the country's oil reserves amount to a meagre 3 billion barrels," said Plamondan.

North Africa, which possesses far smaller oil reserves than the Gulf region, has also witnessed a rise in oil reserves since 2003. Total proven crude oil reserves in North Africa increased from 43 billion barrels in 2003 to nearly 63 billion barrels in 2008, representing a 19-billion-barrel increase.

Libya's oil reserves have grown by 12 billion barrels over the past five years, to 41 billion barrels.

Proven oil reserves in Algeria rose to an estimated 12 billion barrels in 2008, from just 9 billion barrels in 2003.

The UAE has maintained its proven oil reserves at about 98 billion barrels for more than 20 years, while pumping out more than two million barrels per day. "Certainly, the 49-billion-barrel jump in Iran's proven oil reserves looks suspicious," says Plamondan.

"Given the surging growth in energy demand, MENA oil producers will have to raise production levels over the coming years. High global oil prices have jumpstarted upstream oil-sector investment and should eventually lead to a gradual expansion of the region's production capacity," concluded Plamondan.

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