The global oil and gas industry has witnessed a substantial boost from contracts activity in the Middle East, which has resulted in a contract value of $44.4bn in Q3 2019, according to GlobalData, a leading data and analytics company.
The increase in contract value is primarily attributed to Saudi Aramco’s 34 engineering, procurement and construction (EPC) related contracts (worth over $18bn) for projects such as the Marjan and Berri field incremental development program in Saudi Arabia, alongside ADNOC’s $3.6bn contract for the supply of one million metric tons of casing and tubing to support exploration and production activity in United Arab Emirates (UAE). The reported contract value is comparable to the previous quarter, which recorded $45.5bn in value – despite there being a slight decline in the number of contracts from 1,528 in Q2 2019 to 1,386 in Q3 2019.
The company’s latest report,‘Q3 2019 Global Oil & Gas Industry Contracts Review’, states that 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% of the total in Q3 2019. This was followed closely by Europe with 471 contracts, accounting for 34% of the total.
Pritam Kad, Oil and Gas Analyst at GlobalData, commented: “Saudi Aramco’s commitment towards enhancing local presence is demonstrated in-line with its’ In-Kingdom Total Value Add (IKTVA) initiative, which is designed to drive domestic value creation. The recent 34 EPC-related contracts, worth over $18bn, also support this initiative as most of the contract work will be undertaken by local companies/subsidiaries. On the similar note, ADNOC’s $3.6bn casing and tubing supply contract, awarded during Q3, has the potential to achieve an in-country value of over 50%, which is significant.”