IEA watching MENA investments

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PARIS, April 16 (UPI) -- The IEA said it was investigating implications of a potential investment shortfall in upstream activity in the Middle East and North African energy sector.

The International Energy Agency said much of the world's remaining oil and natural gas reserves are in Middle East and North African countries.

IEA Chief Economist Fatih Birol said that in a well-functioning oil market, steady investments in the MENA region should benefit the global economy.

"But energy markets do not function perfectly," he said.

Birol warned there has "long been uncertainty" about the pace of upstream investment, the expansion of production capacity and potential available exports given domestic energy usage in the region.

In its "deferred investment case" meant to look into the implications of investment shortfalls, the IEA found that reductions of as little was 30 percent would "radically" alter the global energy balance.

Higher oil prices, he said, could be beneficial for major oil producers like Libya though the region could see a loss in market share and export revenues long term.

"I am convinced, therefore, that each of us with a stake in the energy sector should pay close attention over the coming months for signs of whether investments in the MENA region are being deferred or are advancing," said Birol.