Oil prices were buoyed throughout 2013 by unexpected production cuts, which reduced output from the oil producers group Opec by almost 800,000 barrels a day (b/d) to just over 30 million b/d.
The London-based Centre for Global Energy Studies forecasts that non-Opec production will increase by 1.5 million b/d in 2014, up from 1.2 million b/d in 2013.
This will have a major impact on Opecs output, with the call on the groups production expected to fall to 29.6 million b/d, from 30.2 million b/d in 2013.
Since 2011, Saudi Arabia has enjoyed a greater share of Opecs output, boosting its production to more than 10 million b/d to balance losses from other producers and to prevent crude prices from rocketing. The kingdom produces almost a third of all Opec crude.
This has been most notable in the case of Libya, which has struggled through most of 2013, with protesters and militia groups blocking exports and closing the countrys refining complexes. Without a political solution, the oil sector will remain at the mercy of the armed groups that now range across the country.
But many analysts are waiting for a drop in Saudi production to make room for rising output outside the group. Non-Opec supplies, particularly from shale formations in the US and oil sands in Canada, look set for another year of robust growth.
Add to this new production capacity coming online in Iraq and the possible return of Iran to the international oil export market, and it looks increasingly unlikely that oil prices can be held at more than $100 a barrel in 2014.
Irans output has dropped to just 2.7 million b/d, falling behind Iraq as the second-largest producer in the region, compared with 3.8 million b/d before tougher UN and US sanctions came into force in 2011.
An agreement reached at the end of November between Iran and the P5+1 partners the US, UK, France, Germany, Russia and China, along with the European Union provides some temporary relief for the regime, although the majority of sanctions remain in place. In return, Tehran has agreed to limitations on its uranium enrichment programme, a handover of some radioactive material and granting inspectors access to its facilities.
For the next six months, Iran will not be able to increase its crude oil sales, which have been slashed to about 1 million b/d, from an average of 2.5 million b/d in 2012. However, if it does not backtrack on any of its commitments, the sanctions could be further relaxed after six months, perhaps allowing the revival of its oil industry.
The next few years look like they will be relatively quiet for Saudi Arabias projects market too. Across the Gulf region, approximately $125bn-worth of engineering, procurement and construction (EPC) deals are scheduled to be awarded in the hydrocarbons sector in 2014.
More than 40 per cent of the project value next year is expected to come from the refining sector, with $52bn-worth of contracts set to be awarded. Another $42bn is expected to come from upstream oil and gas production schemes, and there will be almost $18bn-worth of pipeline deals.
Saudi Arabia will account for just 4 per cent of the market, with only $4.7bn-worth of projects expected to be awarded in the year.
The largest contributor is the burgeoning Iraq oil and gas market, which is undergoing massive growth, and could award $43bn-worth of projects. However, a number of factors make signing anywhere near this total unlikely.
Over the past five years, Iraqs project awards have only reached a peak of about $4bn in 2012. Given the countrys continued instability and rising violence, there is little reason to believe the government can completely turn the market around and boost it tenfold.
Production in Iraq has grown from 2.5 million b/d in 2009, when Baghdad first signed its agreements with international oil companies, to an average of almost 3.2 million b/d in 2013. Iraq is expected to increase production capacity to 3.7 million b/d in early 2014, with the addition of the Gharraf and West Qurna-2 oil fields.
The UKs BP has also signed an agreement to carry out subsurface engineering to stabilise production at the giant Kirkuk field in the north of Iraq. The field, one of the oldest in the region, once produced almost 1.5 million b/d, but production has fallen to only 220,000 b/d. BPs 18-month agreement is expected to lay the groundwork ahead of a full development tender.
Next year should be another year of growth in Iraqs projects market. The Oil Ministry has turned its attention away from increasing production and is now focusing on developing the midstream and downstream sectors. Several critical projects are planned to diversify the countrys crude oil export options and also to deliver refined products to a population whose consumption is growing rapidly.
In November, the Oil Ministry launched one of its most ambitious schemes, issuing a tender for a crude oil export pipeline running through Jordan to the port of Aqaba. Technical proposals are due in March. The ministry hopes to reach financial close for the $7bn pipeline in 2014.
Bids will also be submitted next year for the Nasiriyah integrated project, which involves developing the 4-billion-barrel Nasiriyah oil field along with a 300,000-b/d refinery, the first privately built refinery in Iraq. Technical bids have already been submitted for the construction of a 140,000-b/d refinery at Karbala. Commercial bids have been postponed, but are likely to be given in during 2014.
Having lagged behind its neighbours for years, Kuwait now appears to be shedding its reputation as a relatively small projects market by launching a series of megaprojects in the energy sector. Worth more than $41bn, the schemes could turn Kuwait back into one of the biggest sources of opportunities for EPC contractors.
State refiner Kuwait National Petroleum Company (KNPC) has already issued tenders for the estimated $16.5bn Clean Fuels Project (CFP) and was to receive commercial bids on 24 December. Three contracts are expected to be awarded in early 2014.
The awards will be followed by tenders for the long-awaited New Refinery Project, which KNPC hopes to see awarded by the end of 2014.
The two projects are worth more than $30bn combined and are part of a decade-old plan to increase refining capacity to 1.4 million b/d from the current 810,000 b/d.
Momentum is growing in Kuwait, but international contractors remain wary of their prospects. After all, contracts for the 615,000-b/d new refinery have been awarded before, only to be cancelled under intense parliamentary scrutiny. The refinery will process heavy oil and is intended to secure the supply of low-sulphur fuel oil for Kuwaits power plants.
The CFP involves the upgrade and expansion of the Mina al-Ahmadi and Mina Abdullah refineries and the retirement of the Shuaiba refinery. This will increase the quality of products from the refineries, giving Kuwait access to the more lucrative international high-performance fuels markets.
Along with the downstream schemes, Kuwait Oil Company expects to receive bids at the end of January for the $4.2bn Lower Fars heavy oil project, one of the largest upstream developments in the region. The single EPC tender includes five main parts, covering a steam injection facility, production facilities, a support complex, tank farms and a 270,000-b/d pipeline to transport the heavy crude to the planned new refinery in the south of Kuwait.
Iraq is expected to increase production capacity to 3.7 million barrels of oil a day in early 2014