$573bn oil and gas projects coming up in Mena
Dubai, November 10, 2013
There are currently 315 projects proposed or under development worth a total potential investment of $573.5 billion across the Middle East and North Africa (Mena) region in the oil and gas sector, according to a report.
A race to meet soaring domestic power demand in GCC countries, post-war reconstruction in Iraq, and a desire to ensure global competitiveness in the face of the US shale boom, mean that national operators are investing aggressively in oil and gas programmes across the region, said the EIC Data Stream report.
Between January 2010 and August 2013 there were 185 major contracts (EPC, FEED and PMC) awarded in the region’s upstream sector, according to the EIC Data Stream global project tracking database.
During this period, the top 12 operators awarded 107 (58 per cent) of these contracts and the top 10 contractors won 95 (51 per cent) of the total number of contracts awarded.
However, there has been a steady decline in the number of contracts awarded since 2010, largely due to slowing project realisation rates, stated the EIC report.
Nonetheless, the urgent need for feedstocks for power plants in order to meet soaring domestic demand mean that, in the mid- to long-term, contracting levels will remain healthy as project realisation rates improve, it added.
A race to meet soaring domestic power demand in GCC countries, post-war reconstruction in Iraq, and a desire to ensure global competitiveness in the face of the US shale boom, mean that national operators are investing aggressively in oil and gas programmes across the region, according to the EIC Data Stream report.
Geographically, the highest level of contracting activity has been in the UAE, where a total of 58 major contracts have been awarded. Of these, the majority (53) are in Abu Dhabi, where the government is aggressively pursuing gas developments to fuel its shift to gas-fired power generation, stated the EIC report.
The UAE is followed by Iraq, where a total of 40 major contracts have been awarded. Half of these contracts (20) have been awarded on five major projects – West Qurna One, West QurnaTwo, Majnoon, Zubair and South Rumaila – that are expected to account for 75 per cent of Iraq’s future oil production, the report said.
Iran came a distant third with 27 major contracts awarded followed by Saudi Arabia where 21 major contracts have been awarded, revealed the EIC Data.
Among the top 12 most active operators across the region in terms of the number of major contracts awarded, four are from the UAE - Abu Dhabi National Oil Company (Adnoc), The Zakum Development Company (Zadco), Abu Dhabi Company for Onshore Oil Operations (Adco) and Abu Dhabi Marine Operating Company (Adma-Opco).
All these four Abu Dhabi-based operators were responsible for awarding of about 50 contracts between January 2010 and August 2013, stated the EIC Data Stream report. Adnoc is a majority shareholder in Zadco, Adco and Adma-Opco.
Adnoc has led contracting activity in recent years, awarding 20 contracts across two major developments in Abu Dhabi: the Satah al-Razboot (SARB) gas field development in the Persian Gulf, and the Shah sour gas development in the south-west of the emirate.
In total, Adnoc has awarded 16 EPC,1 FEED and 3 PMC contracts on the projects, which both include the construction of artificial islands to accommodate drilling, production and processing operations in shallow water, said the .
The majority of these contracts, 11 EPC and 2 PMC contracts, were awarded for the $10 billion Shah project to develop 1 bcf/d sour gas. This will be used primarily as a feedstock for planned new power and water desalination and petrochemical capacity in the UAE, and alsofor reinjection into oil fields.
A joint venture company between Adnoc, Japan Oil Development Company and ExxonMobil, Zadco has awarded 14 contracts across 3 developments in Abu Dhabi during the period; while Adco has awarded 11 contracts across two developments followed by Adma-Opco has with 5 contracts across three developments.
These eight projects are focused on oil production, either via new oilfield developments, such as the Umm al-Lulu and Nasr oil fields, or on increasing oil production from existing fields, such as the 1.8 million project and upper and lower Zakum field developments.
According to EIC Data Stream report, Saudi Aramco is the next big player in the scene which has awarded 14 contracts across eight developments in Saudi Arabia since January 2010. Similar to Abu Dhabi, Saudi's upstream sector is dominated by a mix of large-scale gas field developments such as the Wasit and Midyan fields, and maintenance of oil production levels through new and redevelopment oil field projects.
Also three Iranian oil companies – National Iranian Oil Company, Petropars and Peded – are in the Top 12 list. Together the Iranians are accountable for 19 contracts across 11 developments, said the report.
Over half of these contracts (9) are on the North and South Pars projects in the Persian Gulf to recover significant volumes of gas from two of the largest gas fields in the world, it added.
Three international firms also appear in the list - Gazprom, Lukoil and Shell - who account for 17 contracts across the Badra, West Qurna Two and Majnoon oil field developments in Iraq.
The list also revealed the top ten most successful contractors across the region in terms of number of FEED, EPC and PMC contracts awarded across 40 developments between January 2010 and September 2013.
They are WorleyParsons, Saipem, Technip, McDermott international, Fluor, Larsen & Tubro, National Petroleum Construction Company (NPCC), Samsung Engineering, China Petroleum Engineering and Petrofac.
These companies have been awarded a total of 50 EPC contracts, 18 FEED contracts and 6 PMC contracts during the period, said the EIC report.
WorleyParsons was the most successful contractor in the region, securing a total of 14 contracts, followed closely by Saipem with a total of 13 contracts. WorleyParsons figures are fairly evenly spread across work scopes with 4 EPC, 5 FEED and 5 PMC contracts secured.
WorleyParsons has been prosperous in Iraq, having secured the FEED contract, and then the subsequent PMC and EPC contracts for the giant South Rumaila oil field. Additionally, the contractor has been awarded one PMC contract for the West Qurna Two oil field, and three in UAE.
As a FEED contractor, WorleyParsons has operated in Saudi and Kuwait, securing two such contracts in both countries.
In contrast, Saipem has secured 10 EPC contracts and 3 FEED contracts, almost a third of which (4) are in Saudi Arabia. Here the Italian contractor has been awarded four EPC contracts, two of which are contracts totalling $1.35 billion for offshore construction and pipelaying work on the Wasit Gas Development Programme.
Saipem has also been prolific in Abu Dhabi where the contractor has been awarded three EPC contracts worth a total estimated value of $3.6 billion for pipelines, the sulphur recovery unit and the process plant for the Shah sour gas development.
Reflecting the dominance of Abu Dhabi in the region in terms of project activity, on the contractor side, the top ten contractors in the region have secured a total of 24 major contracts in the UAE, 22 of which are in Abu Dhabi.
French contractor Technip and US-based Fluor have both fared well in Abu Dhabi, winning a series of FEED contracts.
In total, Technip has been awarded a further two FEED contracts and three EPC contracts, with the remaining contracts in Dubai, Egypt, Iraq and Saudi Arabia.
Due to the scale of many projects in the Middle East, high-value EPC contracts are prevalent, and these are frequently awarded to consortiums that together can combine specialist skills to address complex work scopes.
In addition to its nine individual contract awards, Technip has been awarded a further four EPC contracts totalling $3.5 billion, in partnership with Abu-Dhabi based National Petroleum Construction Co (NPCC).
The largest of these contracts is a $1.7 billion EPC contract to build the central processing facilitiesfor Zadco’s $10 billion project to increase production from the Upper Zakum offshore oil field.
NPCC itself has been awarded five additional individualcontracts, worth an estimated US$2.3 billion for fabrication and pipelaying projects in Abu Dhabi and Qatar.
Petrofac also appears in the top ten list having secured five contracts (4 EPC and 1 FEED) on oil field projects across the region.-TradeArabia News Service