Oil Price Decline Implications for the Arab World Moderated by John Kemp, Reuters Senior Market An

SPEAKERS: Anas F. AlHajji, Chief Economist at Natural Gas Partners | George Sarraf, Partner at Strategy& | Azza Fawzi, Vice President Finance for Deep Water in Upstream Americas at Shell In recent months a supply-demand imbalance in the oil market has led crude prices to a five-year low, which OPEC has left unaddressed in an unusual move. In turn, non-OPEC higher-cost oil producers have been forced to cancel or delay dozens of new drilling projects. For OPEC, the oil price decline may yield short-term successes in the battle for global market share. The Kingdom of Saudi Arabia (KSA), according to Goldman Sachs, is set to raise production to maximum levels (around 11 million barrels a day) by end of year, in order to drive non-OPEC producers out. As oil prices remain low for a prolonged period of time, additional factors are coming into play. Low prices are putting strains on the finances of countries relying on oil revenues to cover for a significant share of government expenditures. Saudi Arabia, for example, is now forced to draw on its cash reserves and to raise debt in order to cover its government budget, 90% of which is supported by oil revenues. On the other hand, large United States shale producers continue to drive towards savings in production costs, with futures contract prices for 2020 reaching around $60 a barrel, as reported by the Wall Street Journal. In this context, Arab OPEC nations are faced with the substantial challenge of maintaining the competitive advantage of their energy exports given a seemingly inevitable - though gradual - shift away from oil. The objective of this panel is to provide insights into the current price 'war', to examine implications on the Arab world's economic development, and to discuss potential solutions to maintain the competitive advantage of the region's energy sector.