Surge in O&G Projects in GCC
Home to more than half of global crude oil reserves and gas deposits, the Middle East region saw a surge in the completed oil and gas projects in 2018 after a short-term uncertainty over project spending owing to crash in oil price in 2014.
In the GCC region, the value of completed oil, gas and petrochemicals projects was 52% higher in 2018 than the previous year and is also more than any other year over the past decade.
$664bn worth of oil, gas and petrochemicals projects have been planned or underway at the end of 2018 in MENA region. Increasing production capacity and diversifying the product range remains the major objectives of the region’s oil producers.
Saudi Arabia and the UAE spearhead with a pipeline of about $108bn of future projects planned in the said sector. The two countries also account for 80% worth of the projects completed in 2018 in the GCC.
The most significant oil and gas project to come onstream was phase 2 of Adnoc Offshore’s Nasr full-field development project, which had a budget of $4.3bn. The project scope included the development of 123 wells in the western region of Abu Dhabi.
The second-biggest oil and gas project was Khafji Joint Operations’ $3.15bn scheme to develop Divided Zone facilities in Saudi Arabia and Kuwait. KJO is a 50:50 joint venture of Aramco Gulf Operations and Kuwait Gulf Oil Company (KGOC).
This was followed by $2.7bn Sohar refinery expansion project. The project client was Oman Refineries & Petrochemicals Company.
Saudi Arabia developed several landmark oil projects worth $9.2bn in both upstream and downstream sectors in 2018. This included phase 1 of $2.1bn Saudi Aramco’s master gas system expansion project, $1.9bn Jizan refinery project, Luberef’s $1.4bn Yanbu refinery expansion and Sabic’s $1.2bn Jubail methyl methacrylate & polymethylmethacrylate plants.
Plans are already in place for a massive investment of about $396bn in new oil, gas, and refining and petrochemicals schemes in the GCC by 2025. Amid changing market conditions, the world’s biggest oil and gas market ensures that there are plenty of opportunities to look forward to.