Despite rig suspensions, ‘path for growth’ remains in the Middle East

Some US$40Bn in engineering, procurement and construction (EPC) awards in 2024 have created a “path for growth” in the Middle East, according to data shared by a leading energy analyst.

“There is plenty of work coming up, not only this year, but for the next two to three years,” said Maritime Strategies International (MSI) senior offshore energy market analyst, Todd Jensen.

Mr Jensen told delegates at the Annual Offshore Support Journal Conference, Awards and Exhibition, held in London in February, that contracts have granted huge market share for Middle Eastern players, a practice that is common in a region where oil and gas projects are dominated by NOCs.

With around 2,100 fixed-bottom platforms in place, and an expected increase to about 2,300 in the near term, Mr Jensen said the coming years would see a significant installation of infrastructure under the EPC awards. And similarly, he said: “We do expect the number of pipelines to be installed beyond 2026 to increase.”

As for newbuilding activity in the market, Mr Jensen said the Middle East is “pretty much a sold-out market at this point.”

“The Middle East market typically uses smaller and older vessels”

There have been some modest newbuilding programmes for Middle East interests, but generally most orders have been for larger OSVs and harsher environment markets. The Middle East market typically uses smaller and older vessels. 

“These vessels – some of them can keep working – the NOCs have given a bit of a waiver on the age of older vessels, but at some point, they’ll want to bring this more back into line with modern vessels,” Mr Jensen said. “There is going to be some fleet renewal required.”

Mr Jensen noted, alongside EPC awards, Saudi Aramco’s suspensions have had “quite an impact on jack-up markets in the Middle East.”