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Mon 1 Nov 2010 02:28 PM

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Gulf state-backed oil giants 'need more competition'

CEO of Dana Gas says Gulf national oil companies must compete on efficiency, capital allocation

Gulf state-backed oil giants 'need more competition'
The Middle East fulfills 36 percent of world oil demand, and 19 percent of global gas demand

The head of the Gulf's largest listed energy company has called for more competition in a market that is dominated by national oil companies (NOCs).

"NOCs need to be subject to competitive challenge," said Ahmed Rashid Al Arbeed who was speaking during the ADIPEC conference in Abu Dhabi.

"They will become better at resource development, better at capital allocation and more efficient in their use of technical and capital resources."

Al Arbeed warned that the Gulf region could not afford to lose its place as the world's biggest market for hydrocarbons and called on the local industry to implement better regulations.

"Norway, Russia and Brazil have all partially privatised their national companies and these now need to compete," he added.

"In regions where state domination has been removed, the industry has flourished."

The Dana Gas said that the role of the private sector was "indispensable" in a region which has 61 percent of the world's proven oil reserves.

The Middle East fulfills 36 percent of world oil demand, and 19 percent of global gas demand.

The region's abundant energy deposits are controlled by state-run NOCs, such as Saudi Aramco in Saudi Arabia and ADNOC in the UAE.

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