This information was contained in a speech delivered by economic consultant, Khalid Al-Ageel, Kingdom representative in OAPEC executive bureau, Ministry of Petroleum and Mineral Resources, Saudi Arabia. He was speaking at the 4th GCC Economic Forum held in Dubai yesterday. His speech was entitled "The Future Prospects of GCC Oil in the Open Market." Using figures from the International Energy Agency (IEA) published in its International Energy Outlook (1EO 2005) he said global energy demand is expected to increase by 57 per cent between 2002 and 2025. As a result, the consumption of fossil fuels is expected to increase 87 per cent. This breaks down as follows: 37.8 per cent, oil; 25 per cent, natural gas; and 24.2 per cent, coal. Currently, the biggest oil consumers are OECD countries, with China and India catching up fast. Demand in these countries is projected to more than double over this 23- year period. Forecasts show that if China, India and other countries in Asia experience of combined economic growth of 5.5 per cent per year between 2002 and 2025, the highest growth rate in the world, this will translate into a 3.5 per cent increase in regional oil use. While oil is expected to remain the dominant energy source, with demand for crude oil predicted to increase by 52.5 per cent between 2002 and 2025, consumption of natural gas is projected to grow by 69 per cent, while coal consumption is predicted to increase by 59 per cent. Most of the world's incremental oil demand is projected for use in the transportation sector, where there are no competitive alternatives to petroleum products. The IEO report predicts that these costs will increase 61 per cent between 2002 and 2025. Another 28 per cent of the projected increase is expected to be for industrial sector uses, mostly for chemical and petrochemical processes. OPEC countries are expected to be the major source of production increases, especially the GCC countries and other Gulf nations. In 2004, the GCC members' share of world oil production stood at the 21.7 per cent, while oil reserves constituted 40.4 per cent of total world oil reserves. And with GCC producers enjoying a reserve-to-production ratio that exceeds 80 years, production costs at less than $3 per barrel, the capital investment required to increase production capacity among the lowest in the world, substantial capacity expansion is feasible, said Al-Ageel. According to the IEA's "OPEC Revenues Fact Sheet," June 2005, OPEC oil export revenues are far below the peaks reached in the late 1970s/early 1980s - based on inflation-adjusted per capital figures. In real terms, total OPEC export revenues in the 1990s were less than 60 per cent of those in the 1970s. Between 2001-2004, (in constant 2005 dollars) OPEC oil export revenues are averaging $252 billion per year, This is about 47 per cent above the annual average during the 1990s, but remain less than the peaks reached in the late 1970s and early 1980s. Another study by the American Petroleum Institute (API) shows that the US price of gasoline between 1982 and 2004 increased 44.5 per cent or about half as much as the average for 'all items" such as meat, coffee, cereal, fish and seafood, college tuition, prescription drugs, airline fares and tobacco. The depreciation of the dollar, against the euro, the yen and pound sterling, must also be taken into consideration. For although European countries are purchasing imported crude oil at an average nominal price of $35 per barrel, when adjusted for dollar depreciation, the purchase price is $17.5 to $24.5 per barrel. Al-Ageel said: "This situation is extremely positive for European manufacturing and economies in general" and helps to explain the continuous growth in oil demand. PIN/KHALEEJ TIMES