One of the major issues discussed at the recent World Economic Forum in Davos was global dependence on oil in general and the drastic drop in oil prices in particular. Conclusions reached at the Forum pointed to the fact that the oil and gas industry is undergoing a rapid transformation and that new frontiers of exploration and production have enhanced the complexity and extent of both existing and future projects. In addition, analysts see a shortfall in skilled workers that has already affected the industry’s ability to deliver projects safely, profitably and in a timely fashion.

One way of handling this crisis is for current oil producing companies to move away from global reliance on Middle East oil and by diversifying traditionally-oil based economies to methods that move away from fossil fuels.

…THE OIL AND GAS INDUSTRY IS UNDERGOING A RAPID TRANSFORMATION AND …NEW FRONTIERS OF EXPLORATION AND PRODUCTION HAVE ENHANCED THE COMPLEXITY AND EXTENT OF BOTH EXISTING AND FUTURE PROJECTS.

Diversifying Energy Sources

Middle East oil suppliers such as the UAE are already diverting their economies from dependence on oil. At the Davos conference, Suhail Bin Mohammed Al Mazrouei, energy minister of the United Arab Emirates told reporters that in the UAE, “….. we are diversifying the sources of energy…and also we are diversifying the sources of income. We are developing our economy, and year on year we are seeing that the non-oil economy’s contribution is growing.”

Al Mazrouei added that the country was working towards a “transition to have the revenues from the oil industry as a luxury, or as an additional profit that’s going to be reinvested and not to have it as a major contributor in our budget.”

Saudi Arabia, considered the leader of oil producing group OPEC, has been blamed for the continued fall in prices by continuing its high levels of production as part of its strategy to pressure non-OPEC rivals who have higher production costs despite the exiting glut in oil reserves.