Saudi Aramco expects to award contracts for some 90 projects over the next three years as it presses ahead with major expansions of its upstream oil and gas capacity.
Aramco says that from 2023 through 2025 it expects to tender and award contracts for 66 projects related to oil and gas processing and refining facilities, 14 related to pipelines and distribution and 10 for civil infrastructure and security systems.
Contractors attending Saudi Arabia’s recent In-Kingdom Value Add (iktva) Forum in Dhahran said Aramco is ramping up investment again after a slow period during the Covid-19 pandemic and the accompanying economic slowdown.
“It feels like we are back in one of the boom years and [over the next] seven years, this might be the last big push for Aramco and other national oil companies in the region to expand capacity,” one contractor told Energy Intelligence during the forum.
Aramco says the 90 projects on its list are expected to require 12,000 kilometers of pipeline, 20,000 kilometers of cable, and 2.2 million cubic meters of concrete.
Despite the general air of optimism about the business outlook in the region, contractors say it probably won’t be smooth sailing all the way.
Supply Chain Bottlenecks
Firas Soussan of McDermott International said factors such as China’s prolonged Covid-19 lockdowns and the war in Ukraine have “put a lot of challenges on the supply chain — and our projects are basically driven by the supply chain.”
Some contractors said competition for personnel and materials for upstream projects in the Mideast Gulf was mainly between Saudi Arabia and Qatar.
They said Abu Dhabi’s upstream expansion plans have not yet been as noticeable to companies on the ground.
Aramco plans to expand its oil production capacity by 1 million barrels per day to 13 million b/d by 2027, with most of the increase coming from offshore fields.
Other big projects include the development of the Jafurah onshore unconventional gas field and the expansion of Aramco’s Master Gas System.
Contractors are expecting offshore projects to dominate contract awards this year, given the longer lead time needed to secure offshore rigs and other equipment.
“If Aramco wants to meet the target of 13 million b/d by 2027 then most of the offshore work on fields like Safaniya and Manifa need to be awarded this year,” said one contractor.
CEO Amin Nasser said in August that Aramco would ramp up its capital spending to $40 billion-$50 billion in 2022 with further increases following in 2023-25.
In its third-quarter earnings report, the company said capex for the first nine months of 2022 rose to $26 billion from $23 billion in the same period of 2021.
source:https://www.energyintel.com/