JEDDAH – The GCC is forecasted to award a little over $50 billion worth of contracts in the oil, gas and petrochemical projects in 2013, almost double the $27 billion expected to be awarded this year, according to the GCC Oil & Gas Projects Market 2013 report by MEED Insight, the research and consultancy arm of the MEED business.
The upsurge in activity will be good news to contractors, which have suffered from a slowdown in activity since the market saw a record $52 billion worth of contracts awarded in 2009.
Since then, contract award levels have dropped as national oil companies evaluated their project plans; in 2010, some $40 billion worth of contracts were awarded, while this slipped to just $25 billion in 2011, the report said.
Over the next two years, some of the major projects awarded include contracts on Saudi Aramco’s Jizan refinery, major work offshore Abu Dhabi, and new world-scale petrochemical complexes in Qatar.
Some of the most important challenges currently facing the offshore oil & gas industry relate to accessing modern technology and securing the necessary capital to cover the large investments required for exploration, development and production projects.
The coming two years are also likely to see Korean contractors maintain their dominance of the market.
As of September 2012, four out of the top five biggest contractors in the region’s oil and gas sector were Korean.
In terms of contracts under execution, the largest was Samsung Engineering at $12.4 billion, followed by Daelim Industrial Company at $10.1 billion and GS Engineering & Construction at $8.6 billion. All picked up substantial new orders in the first nine months of 2012 with Daelim being particularly successful winning work on the Sadara, PetroRabigh 2 and the Kemya elastomer projects in the Kingdom.
“Recent contract awards to European and Japanese contractors on the Jizan refinery scheme indicate that Korean firms will not have it all their own way over the next few years,” said Ed James, Head of MEED Insight.
“However, we still expect Korean contractors to remain the dominant force in the market.”
Moreover, developments in Kuwait and Oman are also likely to determine whether the $50 billion forecast for 2014 is met as the total includes awards on Kuwait’s $18 billion clean fuels program and the proposed $6 billion Duqm refinery in the sultanate.
Against this backdrop, the organizers of Offshore Middle East, PennWell Corporation announced at a press conference Wednesday in Doha the launch of the upcoming three-day Offshore Middle East 2013 that will open on Jan. 21 at Qatar National Convention Centre.
David Paganie, Conference Director, PennWell Corporation who is the organizer of the event, said “we are delighted to be returning to Qatar with an outstanding conference program that features some of the industry’s most distinguished speakers and companies. With offshore spend predicted to equal onshore investment by 2014, the future looks bright for the offshore oil & gas industry and the event serves as an ideal platform for regional and international businesses to come together to share ideas and expand business interests in the Middle East.”