The global oil and gas industry has seen a substantial boost from contract activity in the Middle East resulting in contract value of $44.4 billion in Q3 2019, according to data and analytics company GlobalData.
GlobalData said that the increase in contract value was primarily attributed to Saudi Aramco’s 34 engineering, procurement, and construction (EPC) related contracts worth over $18 billion for projects such as the Marjan and Berri field incremental development program in Saudi Arabia.
Another factor was ADNOC’s $3.6 billion contract for the supply of one million metric tons of casing and tubing to support exploration and production activity in the United Arab Emirates.
The company added that the reported contract value was comparable to the previous quarter, which recorded $45.5 billion in value, despite a slight decline in the number of contracts from 1,528 in Q2 2019 to 1,386 in Q3 2019.
According to the company’s latest report, the upstream sector reported 1,035 contracts in Q3 2019, followed by midstream and downstream/petrochemical sector with 255 and 109 contracts, respectively, during the quarter.
North America recorded the most contracts with 489, representing 35 percent of the total in the quarter while Europe recorded 471, accounting for 34 percent of the total.
Pritam Kad, oil and gas analyst at GlobalData, said: “Saudi Aramco’s commitment towards enhancing local presence is demonstrated in-line with its’ In-Kingdom Total Value Add’ initiative, which is designed to drive domestic value creation.
“The recent 34 EPC-related contracts […] also support this initiative as most of the contract work will be undertaken by local companies or subsidiaries.
“On a similar note, ADNOC’s casing and tubing supply contract […] has the potential to achieve an in-country value of over 50 percent, which is significant.”
Of the total contracts in the quarter, 61 percent were operation and maintenance related contracts, followed by multiple-scope contracts such as construction, design and engineering, installation, and procurement, which accounted for 12 percent.
The most notable contracts awarded by Saudi Aramco were to McDermott and the COOEC consortium’s worth $3.5billion, another EPCI deal to McDermott worth $1.7 billion, a $3.5 billion contract to Saipem, to Tecnicas Reunidas’ worth $3.36 billion, and L&T Hydrocarbon Engineering and EMAS AMC consortium’s $1 billion deal.
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