Not too many people would have forecast just a few years ago that sanctions-bound Iraq would overtake its Middle East neighbours with the speed of its reforms.
But the region seems to be wading waist-high through tides of red tape and politics as it begins to open its upstream oil industry to foreign investment. The only thing we can be sure of is that it will take still more time before things move on enough to be worth examining. In the meantime, countries like Iraq are overtaking the slow pace of Saudi Arabia and Kuwait.
Hearing some assembled experts discuss its progress recently, the words "missed opportunity" constantly sprang to mind. "There will never be a return to the 'good old days' of before the 1970s," Herman Franssen, president of International Energy Associates, told the Gulf Oil & Gas conference in Houston ruefully.
One things is certain: National oil companies will remain the dominant players in the region, with only a supplementary role for the foreign companies that were expelled from the Gulf's oil fields in the wave of nationalisations that began in the 1950s. Franssen added US companies could find themselves at a disadvantage when vying for investment opportunities in the Middle East. This is not just because of the unilateral sanctions imposed by that country's government against countries such as Iran and Libya, but also because of resentment of Washington's recent pressure on OPEC to boost oil production. "The bullying related to this latest OPEC meeting has been very badly received, not only by our foes in OPEC, but also by our friends in OPEC," he said.
The potential benefits of foreign investment are worth pointing out. Since allowing production sharing, Qatar has increased its production capacity 40% to 800,000 b/d. Despite having some of the most difficult geology in the Gulf, Oman developed a successful system of rewards with Shell. Under this flexible formula, when prices are tight, it revises its oil company deals in favour of the state. When prices are higher, it adjusts back to more favourable terms for oil companies.
Franssen predicted Iran would add 2 million b/d of capacity by the end of the decade under its buyback programme with foreign companies. Iraq could add 3 million b/d by 2010 if sanctions were lifted now, he added.
Another commentator - Hassan al-Hussein, managing director of Gulf Petro-Minerals - said foreign investors need to understand countries in the region want new investment to provide jobs for their nationals and to develop local businesses. He said Saudi Arabia and Kuwait were likely to move slowly on opening oil exploration and production to foreign companies, and that Iran and Iraq were likely frontrunners in attracting foreign upstream investment.
Although the Middle East remains the one part of the world that we all know will still be around in many years producing oil, the fact remains that it is in danger of missing a golden opportunity to raise its game. The moves by governments globally to liberalise their energy sectors have opened vast areas previously closed to exploration, while technology has narrowed the cost advantage the national companies once enjoyed and reduced world oil prices. At the same time, some Middle East countries - notably Saudi Arabia and to a certain extent Kuwait - are facing higher costs.
Joint ventures, with full cooperation on both sides, would see very much a win-win situation. All would benefit from such a process. But today's slow E&P pace in the Middle East is in danger of leaving the region sidelined in terms of new investments for not just years, but possibly decades.