• In 2023, regional oil and gas producers collectively awarded contracts valued at $17.5 billion, marking it as one of the most successful years for capital expenditure on offshore oil and gas projects to date.
The Middle East and North Africa (MENA) region is poised for sustained growth in offshore oil and gas investments in 2024, building upon a landmark year of expenditure in 2023.
MEED magazine reports that in 2023, regional oil and gas producers collectively awarded contracts valued at $17.5 billion, marking it as one of the most successful years for capital expenditure on offshore oil and gas projects to date.
Kuwait leads the list of the five largest offshore development projects in the region with the Al-Durra gas field development, overseen by the Khafji Joint Operations Company between Kuwait and Saudi Arabia. The project is estimated to cost $5 billion.
According to the magazine, the project is currently undergoing preliminary engineering design and is slated for awarding in 2025, with an anticipated completion date set for 2027.
The subsequent four projects include:
- Qatar Energy: $4 billion investment
- ADNOC (UAE): Two projects totaling $4 billion
- Aramco (Saudi Arabia): $1.8 billion initiative
While these projects are currently at different stages of development, they are anticipated to be awarded in 2024 and finalized by 2027.
The magazine attributed the robust spending to the stable oil price environment, with Brent crude averaging $82 per barrel, and to the efforts of government-owned companies in the MENA region to achieve the strategic oil and gas production targets set by their respective governments.
ADNOC emerged as the largest spender on offshore projects in the region last year, awarding contracts estimated at $17 billion for a sour gas development project.
In 2023, Aramco ranked as the second-largest investor in offshore capital projects, awarding contracts valued at $5.5 billion.
Oil and gas producers in the MENA region are anticipated to sustain significant spending on offshore projects in 2024, with Aramco poised to take the lead.
Aramco’s objective is to sustain and progressively enhance production from its mature oil fields. To achieve this, the company must persist in investing in the development and modification of existing infrastructure within these fields, alongside constructing new infrastructure where necessary.
In a distinct development, progress is underway in the joint project between Aramco and the Kuwait Petroleum Corporation to develop gas from the Al-Durra offshore field, spanning a 5,770-square-kilometer area divided between Saudi Arabia and Kuwait. French company Technip has been chosen to conduct the engineering and preliminary design work for the field development project.
The collaborative endeavor anticipates a daily gas production of approximately 1 billion cubic feet from the Al-Durra field, with both parties committed to equitable production sharing. Pending resolution of disputes with Iran regarding asset development, Saudi Arabia and Kuwait could potentially proceed to award contracts for the project by year’s end. Envisaged to be executed under the engineering, procurement, and construction (EPC) system, the project is forecasted to incur an estimated cost of $5 billion.
