The Mena region saw an estimated $287bn-worth of major contract awards in the oil, gas and petrochemicals sectors from January 2012 to September 2017, according to MEED Projects.
In 2016, project activity in the Mena region witnessed the lowest spending since 2008, with the value of contract awards declining to $36.2bn from $59.9bn in 2015. Project awards significantly fared better in 2017, region’s leading market intelligence platform noted yesterday.
According MEED, the ranking of top contractors has changed considerably over the past decade. Previous top firms such as France’s Technip, Japan’s Chiyoda Corporation and KBR, Bechtel and Fluor Corporation, have either slipped down the list or fallen off it entirely. And the presence of China’s contractors has been growing in the region, but none have yet made it to the ranks of top 10 contractors during November 2016-October 2017, except China Petroleum Engineering & Construction Corporation, which won contracts worth a total of about $1.3bn in Algeria, Iraq and Kuwait.
About $57.4bn-worth of EPC (engineering, procurement and construction) contracts were signed by 22 December 2017, a 58 per cent rise over contract awards in full-year 2016. Countries such as Iran, Oman and Jordan witnessed significant traction in project awards during 2017. The Mena hydrocarbons projects market fared well in 2014 and 2015, but since then appears to have been affected by the collapse of crude prices. The market in 2014 and 2015 was buoyed by the award of Kuwait’s two refinery megaprojects, which largely account for the jump in spending over the two years and subsequent fall.
Over the period in review, Iran was the second-largest market, with a total spend of $64.8bn. Since the lifting of sanctions in 2016, the oil and gas projects market in Iran has picked up well, and in 2017, contracts worth about $11.8bn were awarded as against $4.6bn in 2016. In recent times, such tremendous growth was only witnessed in 2011, when contracts worth $15.8bn were awarded in Iran.
The 2011-16 period witnessed the resurgence of large European contractors, including the UK’s Petrofac, Italy’s Saipem and Spain’s Tecnicas Reunidas, who were among the top three contractors. Between November 2016 and October 2017, these three contractors featured again in the list of top 10 contractors, together accounting for about $10bn-worth of projects. Italy’s Saipem won contracts across the region. In terms of value, the Zohr gas field export pipeline project in Egypt, worth $900m, was the largest project won by Saipem, followed by Kuwait Oil Company’s new refinery feed pipeline project in the Al-Zour area of Kuwait, worth $850m.
Spain’s Tecnicas Reunidas won one contract in Oman in a joint venture with South Korea’s Daewoo. In Oman, Tecnicas Reunidas is part of the $2.7bn Duqm refinery process unit (Phase 1) project. UK’s Petrofac is also part of the Duqm refinery project in Oman, where it is working in a joint venture with Samsung Engineering on the $2bn offsite and utilities (Phase 2) project. Another major project that came under Petrofac’s portfolio during November 2016-October 2017 was that for constructing Gathering Centre 32 at the Burgan field in the southeast of Kuwait. Jordan’s Mass Group Holding (MGH) won one of the largest projects during the past year. It was awarded a $3bn contract for constructing Iraq’s strategic Najaf-Aqaba crude oil export pipeline.
Including Iran, the total value of planned and unawarded projects in the region is estimated to be $388.5bn, making Iran the largest and leading contributor for planned projects in the region as of December 2017.
About 67 per cent of planned projects in the Mena region are in the study phase, which is a sign of the uncertainty over how many of the planned schemes will come into fruition in the coming years.
