The Prospects for Petroleum Output and Investment in MENA Oil Exporting Countries, 2005-2030 For the Middle East Economic Association Meetings in Chicago; January, 2007.

Intro: Is it likely that the output of petroleum will expand sufficiently during the next quarter century, that its inflation adjusted price will stay relatively constant? How much investment funds will be necessary for the corresponding expansion in capacity? The demand side of this question is well understood, although recently practitioners had underestimated the expansion of consumption in China, India, and the U.S. However, there are several aspects of the supply side that are less understood, such as the impact of new technology, the potential for discoveries of new reserves, and the control over output exercised by OPEC. The reader frequently encounters predictions that non-OPEC will reach its maximum output within a decade, but there is rather less agreement on what to expect from the OPEC countries. Current Projections There are several efforts at predicting the future of the oil industry, in terms of identifying various scenarios: by governmental agencies, oil companies, and consultants, and in fact an appreciable amount is available on the web--both the projections themselves, and conferences dedicated to the subject.1 The two most widely cited sets of annual studie