Gulf hydrocarbon exporters and other oil producers in the Middle East and North Africa (MENA) need to invest nearly $4 trillion until 2035 to expand their crude and gas production capacity, according to an Arab analyst.

However, such investments could be blocked by rising costs and funding constraints, said Ali Aissaoui, a senior consultant at the Saudi-based Arab Petroleum Investment Corp (Apicorp), an affiliate of the 10-nation Organisation of Arab Petroleum Exporting Countries (OAPEC).

He said the capacity expansions would be driven by a steady growth in energy demand, which would likely surge by around a third during that period, with nearly 60 percent of the growth coming from China, India and the Middle East.

Aissaoui, presenting a study to an oil and finance conference in London this week, said the pattern of energy supply was undergoing major changes as oil, which continues to be driven by transport, grows at the slowest rate of less than 20 percent to 2035. Nonetheless, he said, oil remained dominant in the global energy mix.

In contrast, natural gas grew by more than 50 percent to 2035, supported by developments in unconventional gas. MENA was expected to supply the largest part of the growth in oil, much of which would come from Iraq.

“Accordingly, MENA should contribute nearly $4 trillion in energy investment to 2035, representing some 10 percent of global requirements,” he said. “Although this share is below potential, it is far from certain that the resultant level – an average annual investment of around $160 billion – will be forthcoming in the medium term due to the perception of deteriorating investment climate, unrelenting rising cost and major funding constraints.”