30pc hydrocarbon projects in Gulf 'put on hold'
Dubai, October 18, 2009
About 30 per cent of the upcoming 578 hydrocarbon projects in the GCC countries have been put on hold or cancelled, said a new report.
Of the remaining projects, about 30 per cent is currently under construction, while the other 40 per cent is in the pre-construction phase, the report by Dubai-based research house Proleads Global said.
According to prolead, the GCC countries remain the most active construction markets in the world for the oil, gas and petrochemical industries with projects budgeted at more than $690 billion.
Commenting on the report, Emil Rademeyer, director of Proleads, said: 'GCC countries have been taking a long, hard look at spending in the wake of the global recession, falling demand and the volatility of oil markets with projects rescheduled to take advantage of lower costs or cancelled.'
“Overall, however, there remains a huge amount of activity in the GCC oil, gas and petrochemical sectors, earnings from which constitute about 85 per cent of the region’s export revenues. The demand for hydrocarbons and refined product can also be expected to pick up as the global economy gradually pulls out of recession,” Rademeyer explained.
The report projects that cashflow in the GCC hydrocarbon market will stabilise in 2010 at levels similar to those found in late 2007.
“However, the cashflow picture could rapidly deteriorate if projects in the pipeline scheduled to begin construction do not start as planned,” said Rademeyer.
According to the report, almost one third of petrochemical projects in Saudi Arabia are currently on hold.
Overall, the GCC oil sector – of which Saudi Arabia contributes most - currently has 281 projects worth $304 billion, 89 per cent of which are in the construction or pre-construction phases.
The gas sector – with Qatar leading the way - has 155 projects worth $178 billion with 85 per cent in construction or pre-construction. Saudi Arabia is the largest contributor in the petrochemical sector with 142 projects worth $207 billion – 72 per cent of which are in construction or pre-construction.-TradeArabia News Service