Becht targets Middle East for expansion2 May 2023
US-headquartered engineering services company Becht is pushing to significantly expand its presence in the Middle East to take advantage of opportunities in the region’s energy sector, according to Chris Van der Beek, director of Becht for Europe, the Middle East and Africa.
“We already have a local agency partner in the UAE and are in discussions with potential agency partners in Saudi Arabia and Oman,” said Van der Beek.
The company has active contracts across the Middle East and expects to win more contracts from existing clients as well as new clients.
In the Middle East and North Africa (Mena) region, Becht is active in the UAE, Qatar, Saudi Arabia, Oman, Iraq, Algeria and Egypt.
“We have grown our services over recent years,” said Van der Beek. “The services we offer have increasing width and depth and we would like our existing clients to use more of our capabilities.
“That is our first focus. Our second focus is adding new clients.”
Historically, the company has provided consultancy services to refineries, petrochemical facilities and power stations in the field of engineering solutions and the use of plant equipment, including cranes and other heavy machinery.
Over the years, it has built on this offering to add consultancy services in supply chain optimisation, crude optimisation and margin optimisation.
Becht is now also providing its clients with digital answers and solutions focused on adapting to the global energy transition.
“We provide solutions and build long-term relationships, and with most of our companies, we will have a long-term technical service agreement,” said Van der Beek.
“Under this, we will help them with both small and larger questions as well as small and large projects.”
We believe that, by 2050, there is still going to be oil and gas around as well as a wide range of energy transition projects and this will mean a lot of work for companies like us
It is possible that Becht’s pursuit of expansion in the Mena region could result in it gaining significant market share in some countries.
It is already well established in North America, with more than 95 per cent of the refineries in the US and Canada on Becht’s roster of clients.
“Our consultancy contracts cover high-value technical engineering work for projects from cradle to grave, whether it is a project that is being developed or a facility that is already operational,” said Van der Beek.
“The clients are normally companies that can run and maintain a facility, but if something happens, such as a process not working optimally or a safety issue, then we can help to investigate that and help with solutions.”
Saudi Arabia is currently Becht’s biggest market in the Middle East in terms of active contracts, followed by the UAE and Oman.
The company mainly works on refining and petrochemical projects, but is also focused on natural gas plants, ammonia facilities and hydrogen projects.
“Our company has a very diverse offering that we believe will take advantage of a lot of growth areas in the region,” said Van der Beek.
“In Saudi, we have two large petrochemical companies as clients and our work includes carrying out engineering work for mechanical and technical improvements for facilities.
“In both cases, the work is focused on an already operational asset. When they run into reliability issues or other types of issues, we are there to assist.
“Often, they don’t have the very specific knowledge that is needed to solve certain projects in-house.
“Sometimes the technology supplier doesn’t even have the knowledge, but we can help them overcome these problems with detailed designs and advice about better equipment and materials to solve problems.”
Much of the engineering work conducted by Becht is done remotely, but it also sends out teams to visit projects and gather data.
The company has around 1,500 specialist consultants, most of whom have experience working as experts for oil and gas majors such as Shell, Exxon, BP and Total.
During 2022 and 2023, there has been a surge in large infrastructure project contract awards in the Mena region, leading to increased demand for skilled engineers.
Last year, more than $30bn-worth of contracts were awarded by oil, gas and petrochemicals producers in the Middle East and North Africa, according to regional projects tracker MEED Projects.
Gulf energy producers and petrochemicals manufacturers have leveraged high oil and gas prices to push through big-ticket projects. Yet project operators and service providers have not fully restored their workforces since laying off people during the pandemic, putting their existing resources under stress.
Van der Beek sees the skills crunch in the Mena region as a big opportunity for his company.
“A lot of companies are struggling to attract new talent to their firms,” he said. “We can supply the expertise and knowledge needed to help their full-time inexperienced staff.
“We can step in and solve problems and we can also help companies by offering coaching and physical training on-site to help people grow their skills.”
With the world population growing and rising standards of living in Asia, we expect increased demand for petrochemical products
Energy sector outlook
Van der Beek believes there will be significant opportunities in both the oil and gas sector and in energy transition projects up to 2050.
“We have been looking at the global situation and the heavy growth in population of 1.7 billion people by 2050 and the speed of the energy transition,” he said.
“We believe that, by 2050, there is still going to be oil and gas around as well as a wide range of energy transition projects and this will mean a lot of work for companies like us.”
Becht expects petrochemicals to be a big growth area in Saudi Arabia over the next decade.
“Amid the energy transition, there is going to be lower demand for fuels, so the molecules will be used for other purposes, and one of the logical ones is chemicals,” said Van der Beek.
“With the world population growing and rising standards of living in Asia, we expect increased demand for petrochemical products.”
Becht expects the Middle East to be either its number one growth region over the mid-term or second after the Asia Pacific.
“Downstream businesses, and the global oil and gas sector in general, are recovering from the Covid-19 pandemic, so there is a lot of growth in different regions, but the Middle East remains specifically important for us,” said Van der Beek.
“If you are driving around Saudi Arabia in the Jubail area, there are tens of kilometres with only refineries and chemical plants. It’s so huge. There is a wealth of opportunities for us in the country.
“However, we don’t see our growth in Saudi as something that will happen overnight. We want to grow our relationships there and we intend to take this slowly and prove ourselves through the quality of our work.
“We are going to invest time and resources and grow in a controlled way to maintain that quality.”
Becht hopes to sign several broad technical service contracts with companies in Saudi Arabia in the coming months.
The areas where it hopes to sign the contracts include process support, engineering support, asset integrity and turnaround optimisation.
Van der Beek says his company is not actively investing resources in winning new work across the whole of the Mena region, although the firm is willing to evaluate potential projects in most markets.
“The volume of activity that we are seeing in countries such as Saudi Arabia means that we have to choose carefully which markets to invest our business development resources in,” he said.
According to Van der Beek, Becht sees its expansion strategy in the Middle East as a marathon rather than a sprint. It is focusing on competing with other companies on the high standards that it delivers, rather than putting all of its efforts into offering the lowest bid prices.
He believes that his company’s focus on quality ensures that existing clients become repeat customers and helps to form a solid foundation for sustainable growth.
Exclusive from Meed
Kuwait cancels oil financing tender
6 June 2023
Region positions itself for sustainable future
6 June 2023
Hospital boost for Jordan construction
5 June 2023
Political deadlock in Lebanon blocks reforms
5 June 2023
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Sports Boulevard to seek partner for iconic buildings
6 June 2023
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Saudi Arabia’s Sports Boulevard Foundation plans to collaborate with contractors for the iconic buildings that are part of the world’s longest park stretching across the centre of Riyadh.
“There are still many infrastructure and iconic building projects in the design stage, and we will be seeking great construction partners to join us on a collaborative basis on this great journey,” said Tony Aikenhead, chief development officer of the Sports Boulevard Foundation, at MEED’s Saudi Giga Projects conference in Riyadh on 5 June.
Iconic destinations planned for the development include the Sands Sports Park, Amphitheatres, the Centre for Cinematic Arts, the Arts District, the Discovery Park, Wadi Ajyasen and the Global Sports Tower.
The large-scale project aims to turn the cityscape of central Riyadh, which today is dominated by major highways, into a recreational area.
“It is truly a transformational project, which will become the world’s longest park at over 135 kilometres in length and will help to deliver on the objectives of Vision 2030. Sports Boulevard runs across Riyadh from east to west. That’s where the complexity comes in because it’s right through the centre of Riyadh along the service corridor,” said Aikenhead.
The project will be spread across different districts within the park. “The Boulevard will be split into street districts to maximise the unique features and attractions the city offers,” he said. “Each district will deliver a different destination and a different array of opportunities for residents and visitors alike.
“We are making good early progress in the delivery of these districts. Construction has already begun in the Wadi Hanifa district on the site of the bridge, the arts district and the promenade. We have also started work on the Prince Turki and King Abdulaziz underpasses,” said Aikenhead.https://image.digitalinsightresearch.in/uploads/NewsArticle/10916967/main.jpg
Kuwait cancels oil financing tender
6 June 2023
Kuwait’s national oil company Kuwait Petroleum Corporation (KPC) has cancelled its tender for a consultant to study financing options for the country’s state-owned oil and gas companies.
In a statement published by KPC’s Higher Purchase Committee it said that the companies that purchased tender documents are eligible for a refund.
The invitation to bid on the tender was issued on 18 December 2022.
KPC did not give a reason for the cancellation of the tender.
Kuwait has been looking to increase efficiency and restructure its state-owed oil and gas companies for several years.
In 2020, a contract for a study to look into the restructuring was won by UK-based Strategy&, a subsidiary of the financial services company PwC.
The plan was expected to cut costs and merge many of the state-controlled companies in the country’s oil, gas and petrochemicals sector.
At the time, KPC said that the mergers would slash the number of large state-controlled companies in the sector from eight to four.
In 2020, local reports said the Supreme Petroleum Council (SPC) and KPC had already approved plans to restructure the oil sector.
It is thought that the restructuring could have significant benefits for KPC in the long term.
A similar restructuring by Abu Dhabi National Oil Company (Adnoc) helped to open the door for increased foreign investment in the UAE’s energy sector.
After a sweeping restructuring, in December 2017 Adnoc listed 10 per cent of Adnoc Distribution, the largest operator of retail fuel service stations and convenience stores in the UAE. This raised $851m, making it the largest initial public offering in Abu Dhabi in a decade.
In May 2022, KPC said that it was considering selling shares in its downstream subsidiary Kuwait National Petroleum Company (KNPC), with the Higher Purchase Committee tendering a contract for a feasibility study regarding the potential “partial divestment of shares in KNPC”.
At the time, the announcement about the potential share sale from the Higher Purchase Committee surprised many within Kuwait’s oil and gas sector.
Despite Kuwait publicly discussing the restructuring of its oil and gas sector for several years, very little concrete progress has been made towards making the planned mergers.https://image.digitalinsightresearch.in/uploads/NewsArticle/10915058/main.gif
Region positions itself for sustainable future
6 June 2023
At the end of November, the region will host the UN’s climate change conference for the second time in two years. Cop28 in the UAE, like Egypt’s Cop27 last year, will bring world leaders together to discuss energy transition and the fight against climate change.
Arresting climate change will arguably be humankind’s greatest challenge over the coming decades. To succeed, people from all over the world will need to work with each other, which is why events like Cop28 that bring countries together are so important – despite the criticism they can attract.
At the project level, cooperation will also become an increasingly important trend.
This year there are clear signs that governments are jointly working on projects that will contribute to the fight against climate change.
Some of the best examples are in the transmission and distribution sector. In recent months, significant steps have been taken across a range of interconnection projects to link countries’ electricity grids.
Efficiency is the main driver for these projects. Particularly for GCC nations, the capacity to obtain large-scale solar energy affordably, combined with the marked differences in peak energy demands between the colder and hotter months, frequently leads to considerable surplus capacity.
Smoothing out these peaks and troughs as part of a larger regional or international grid also means less power generation is required and reduced carbon emissions.
As the shared challenge of climate change rises up the global agenda, more projects that pool resources, share expertise, and transcend borders and politics will be needed.
From regional collaborations on electricity grid interconnections to international climate conferences, the region is positioning itself at the centre of a more collaborative and sustainable future.
This package includes:
> Region plans vital big grid connections
> Soaring data demand drives boom
> Read the June 2023 MEED Business Reviewhttps://image.digitalinsightresearch.in/uploads/NewsArticle/10910825/main.gif
Hospital boost for Jordan construction
5 June 2023
This package on Jordan's construction sector also includes:
> Egis selected for Jordan hospital project
> Jordan's largest construction project to move onsite
> Hill wins work on Saudi-backed hospital project in Jordan
> PIF to invest $24bn in six Mena countries
Jordan’s construction sector will get a major boost this year as the country’s largest project prepares to move onsite over the summer after the first phase of its masterplan has been finalised.
The $400m hospital project is being developed by the Saudi Jordanian Fund for Medical and Educational Investments Company (SJFMEI) on a build-operate-transfer (BOT) basis.
For the hospital project, SJFMEI appointed US-based Hill International in partnership with the local sub-consultant Dar al-Omran to provide project construction management services last year. The project team is now preparing to tender construction contracts.
“We have completed the first phase of the masterplan,” Said Mneimne, senior vice-president of Hill International, told MEED in an interview.
“This summer, we will appoint a contractor for the enabling works. We will then appoint a contractor for the foundations and the structure,” he added.
The scale of the project is a challenge for Jordan’s construction sector, and an international engineering, procurement and construction (EPC) contractor may be needed to deliver the project.
“We have not yet decided what the contracting strategy will be,” Mneimne said.
The project involves the construction of a university hospital with 330 beds, 72 outpatient clinics, a children’s hospital, and a medical school with a total capacity of 600 students and a projected annual intake of 100 students.
The project also includes five medical centres of excellence focused on disciplines such as cardiology, oncology, neurology, gastroenterology and orthopaedics. There will also be four scientific research centres in genomics and precision medicine, stem cells and regenerative medicine, health systems and public health, and bioinformatics.
The built-up area is estimated at 110,000 square metres. It will be located on the airport road, near the Ghamadan area on the outskirts of Amman.
A joint venture of Lebanon’s Dar al-Handasah (Shair & Partners) and Perkins & Will was appointed for the engineering design and supervision services.
SJFMEI is a wholly owned subsidiary of the Saudi Jordanian Investment Fund (SJIF). Saudi Arabia’s Public Investment Fund (PIF) owns 95 per cent of the fund, while Jordanian banks hold the remaining 5 per cent.
Ownership of the project will be transferred to the Jordanian government after the end of the investment period.
The hospital is the largest active standalone project in Jordan, according to regional projects tracker MEED Projects. The second-largest project is the estimated $228m King Hussein Bridge Terminal and Freight Yard project, which is at the prequalification stage.
Major projects are needed after a disappointing decade for Jordan’s construction sector.
Data from MEED Projects shows a fluctuating trend in the value of construction and transport contracts awarded in Jordan over the past 10 years.
In 2013, the total value stood at $1.429bn. A sharp rise in 2014 to $2.475bn marked the peak of contract awards during the period.
A steep fall was witnessed in the subsequent years, with the total value plunging to just $662m in 2015, a dramatic decrease of nearly 73 per cent from the previous year. This downward trajectory continued, with the value plummeting further to a record low of $79m in 2020 amid the global economic disruption caused by the Covid-19 pandemic.
A closer look at the data indicates periods of minor recovery, notably in 2017, when contract awards rose to $866m, following a particularly poor performance in 2016 at just $159m.
Despite these rebounds, the overall trend illustrates a declining construction and transport sector in Jordan, with the years 2021 and 2022 recording values of $32m and $86m, respectively, a stark contrast to the highs of 2013 and 2014.
The fluctuating values in contract awards reveal the industry’s volatility over the past decade, linked to regional instability, economic downturns and global disruptions including the Covid-19 pandemic.https://image.digitalinsightresearch.in/uploads/NewsArticle/10914437/main.gif
Political deadlock in Lebanon blocks reforms
5 June 2023
Lebanon’s political deadlock is likely to continue to weigh on the country’s economy and undermine security over the medium term, according to experts.
The country currently has an interim government and has been without a president since former President Michel Aoun’s term ended at the end of October last year.
Progress towards forming a new government is likely to be slow, with the legislature divided over who should replace Aoun as president.
In March, the Iran-backed Hezbollah group and House Speaker Nabih Berri’s Amal Movement party – which together constitute Lebanon’s Shia base – announced their support for the Christian politician Sleiman Frangieh.
Hezbollah and its allies have since tried to gather support for Frangieh as president, but strong opposition from the majority of the country’s Christian, Sunni and Druze political blocs has left him short of the 65 votes required to be elected in the 128-member legislature.
Over recent weeks, members of Lebanon’s parliament that oppose Frangieh have started to rally around the former finance minister Jihad Azour.
Azour currently serves as the director of the Middle East and Central Asia Department at the International Monetary Fund (IMF).
As the parliament is divided, whether either candidate can obtain a majority vote remains uncertain. According to experts, even if a president is named, it will be extremely difficult for them to form a government.
Nicholas Blanford, a non-resident senior fellow with the Atlantic Council’s Middle East programmes, says it will likely be some time before a government is formed.
“Getting a president elected is only the first step,” he said. “Once the new president is in place, there is the tricky task of forming a new government.
“As we’ve seen over the past 20 years, forming a new government can take months as people bicker and jostle for various lucrative and influential portfolios.”
Barbara Leaf, the US assistant secretary for Near Eastern affairs, said on 31 May, during a Senate committee hearing, that the Biden administration was considering sanctions if a new president is not elected soon
Only when a government has been formed will Lebanon be able to start initiating the series of reforms that the international community has demanded to unlock aid, grants and loans to try to put the country on the path to economic recovery.
As Lebanon’s economic crisis has worsened and the security situation has declined, increasing pressure has been applied from other countries that want to try to restore stability in the region.
Barbara Leaf, the US assistant secretary for Near Eastern affairs, said on 31 May, during a Senate committee hearing, that the Biden administration was considering sanctions if a new president is not elected soon.
Separately, two members of the US House Foreign Affairs Committee called on the administration to impose sanctions on individuals involved in corruption to “make clear to Lebanon’s political class that the status quo is not acceptable”.
In a letter to Secretary of State Antony Blinken on 30 May, they said: “We also call on the administration to continue pressing for full accountability for the August 2020 Beirut port blast and support independent, international investigatory efforts into egregious fraud and malfeasance by the governor of Lebanon’s central bank.
They added: “We must not allow Lebanon to be held hostage by those looking to advance their own selfish interests.”
French officials have also taken action to try to crack down on perceived corruption by members of Lebanon’s political elite.
In May, French prosecutors issued an arrest warrant for Lebanon’s central bank governor, Riad Salameh.
The warrant followed Salameh’s failure to appear before French prosecutors to be questioned on corruption charges.
In response, Salameh issued a statement saying that the arrest warrant violated the law.
Salameh has been the target of a series of judicial investigations at home and abroad on allegations that include fraud, money laundering and illicit enrichment.
European investigators looking into the fortune he has amassed during three decades in the job had scheduled a hearing in Paris for 16 May.
A key problem is you still have the same cabal of oligarchs in power and it is likely they will still be represented in the next government
Nicholas Blanford, Atlantic Council’s Middle East programmes
Breaking the deadlock
Analysts believe cracking down on corruption among Lebanon’s political elite is key to breaking the country’s political deadlock.
“A key problem is that you still have the same cabal of oligarchs in power and it is likely that they will still be represented in the next government,” said Blanford. “These oligarchs do not want reform because if they implement a meaningful reform process, they run the risk of losing their positions of power.”
While the country’s opposing political blocs continue to vie for power and the formation of a new government seemingly remains only possible after at least several months of negotiations, the outlook for Lebanon in the short term looks bleak.
Meaningful government assistance for Lebanese citizens struggling with declining security and heightened economic pressures remains a distant prospect. High levels of emigration are also likely to continue as the country’s population seeks relief from the hardships at home.https://image.digitalinsightresearch.in/uploads/NewsArticle/10907713/main.gif