Saudi rig suspensions slow Middle East offshore growth prospects

July 9, 2024
The analyst now expects growth in the region of 1%, down from its previous estimate of 4%, mainly supported by activity in Qatar and the UAE to fulfill their respective oil and gas production targets.

Maritime Strategies International (MSI) has scaled back its projection for jackup drilling demand in the Middle East Gulf region, following Saudi Aramco’s decision to suspend contracts for over 20 jackups.

The analyst now expects growth in the region of 1%, down from its previous estimate of 4%, mainly supported by activity in Qatar and the UAE to fulfill their respective oil and gas production targets.

MSI has also revised down its charter rate growth projection for standard jackups by around 4%. Some of the rigs, it added, will be stacked in Saudi Arabia to limit running costs and in anticipation of continued work once the suspensions are lifted.

General offshore activity in the Middle Eastern Gulf remains strong: MSI highlighted two contract awards for Saipem in Saudi Arabia with a combined value of $700 million.

These cover the replacement of lateral offshore lines at the Berri and Manifa oilfields and installation of a 49-km 48-in. trunkline at the Abu Safah oilfield.

Offshore the UAE, ADNOC awarded NMDC Energies an EPCI contract for water injection pipelines and topside modifications on four wellhead platforms serving the Lower Zakum development.

And Iran's Oil Ministry has handed out $20 billion of contracts to build 28 new platforms and install 56 compressors at the South Pars gas field in the Persian Gulf, to Iranian companies including Petropars, OIEC, Khatam Al Anbiya Construction and Mapna Group.

Related