meed-logo

line1 line2 line3
SIGN IN / REGISTER

Events in January will shape Saudi market in 2024

1 February 2024

 

Register for MEED's guest programme 

January was a pivotal month for Saudi Arabia with a series of significant events that will shape how the market performs in 2024.

The month started well with major project deals signed that boosted confidence further after the market recorded its best-ever total value of contracts awarded. That optimism was tempered later in the month as fresh concerns over the outlook for project spending emerged after a high-profile corruption case and a government directive instructing Saudi Aramco to halt its plans to increase the kingdom’s oil production capacity.

Oil decision

In a statement on 30 January, Aramco said it had received a directive from the energy ministry to maintain its maximum sustainable capacity (MSC) at 12 million barrels a day (b/d). The state energy giant had previously been set a target of achieving an oil output spare capacity of 13 million b/d by 2027.

While some have interpreted the decision as a political move aimed at propping up the global oil price, others say it has been made to reduce capital expenditure commitments so Aramco can make larger dividend payments to its shareholders. The government holds a 90% share of the company, the PIF owns an 8% stake, and the remaining 2% of the shares are listed on the Saudi Stock Exchange (Tadawul).

Building boom

For construction, the largest contract award in January was the $4.7bn deal signed by Italy’s WeBuild to deliver three dams at the Trojena mountain resort in Neom that will host the 2029 Asian Winter Games. Other major deals included the SR1.8bn deal signed by Dubai-based Alec for constructing the Ilmi Centre at Misk, and the local MBL being selected for the contract to build the opera house at Jeddah Central.

Meanwhile at Al Ula, the kingdom’s Oversight & Anti-Corruption Authority (Nazaha) has suspended the CEO of the Royal Commission for Al Ula Governorate on the grounds of corruption and money-laundering charges. The charges against the executive, Amr Bin Saleh Abdul Rahman Al Madani, relate to his activities both before and during his role at the Royal Commission, involving the awards of contracts to a company named National Talents Company (TalentS).

Economic forecasts

These developments came amid a backdrop of mixed economic data. In mid-January, the Washington-based IMF revised the expected real GDP growth figure for Saudi Arabia in 2024 to 2.7%, down from the projection of 4% that it made three months earlier in October. The downgraded forecast reflects Saudi Arabia’s deepening oil production cuts.

Saudi Arabia’s additional voluntary cuts are by far the deepest by Opec+, with Riyadh agreeing to cut its oil production by a further 1 million barrels a day (b/d) through to the end of Q1 2024 – a cut double the size of the voluntary 500,000 b/d reduction by Russia – the next largest – for the same period.

Despite Western sanctions, Russia has also overtaken Saudi Arabia as China’s biggest source of oil imports in 2023. According to Chinese customs data released on 22 January, China – the largest oil importer in the world – purchased a record 107.2 million tonnes of crude oil from Russia last year, about 25% more than in 2022. Falling by 1.8%, China imported about 86 million tonnes of oil from Saudi Arabia.

A more positive indicator for Saudi Arabia is FDI. The kingdom’s foreign direct investment (FDI) inflows increased by 29.1% in the third quarter of 2023 compared to the previous three months, according to the Saudi Central Bank.

FDI inflows reached SR7.99bn ($2.13bn), rising from SR6.2bn recorded in the previous quarter. The announcement follows last year’s amendment of the country’s FDI calculation methodology by the government in Riyadh, showing that inflows doubled from 2015 to 2022.

Debt deals

As the economic outlook cools, Riyadh has tapped the debt markets. At the start of January, the Finance Ministry said it expects to borrow $23bn in 2024. The financing will be used to finance the deficit in the state budget and to pay existing debt that matures. The ministry added that by the end of 2024, it expects the kingdom’s total debt portfolio to reach SR1.115tn, which is about 29 per cent of GDP. That announcement was quickly followed by the issuance of $12bn of bonds under Saudi Arabia’s Global Medium-Term Note Issuance Programme (GMTN). Later in January, the Public Investment Fund (PIF) completed a $5bn bond issuance.

Both the government and the PIF could receive a cash boost from selling more shares in Saudi Aramco on the Tadawul. On 31 January, Bloomberg reported that the kingdom is working with a group of advisers and is seeking to potentially raise at least $10bn.

These developments are important for the projects sector. According to regional projects tracker MEED Projects, there are contracts valued at $181bn at the tender stage in the kingdom. The prospects for many of these pending deals will be shaped by what happened in January.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11481164/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Adnoc Onshore selects contractors for well tie-ins project

    27 October 2026

     

    Abu Dhabi National Oil Company’s onshore operating arm (Adnoc Onshore) has selected contractors for a major project to tie in wells across the Bab and North East Bab oil field developments in Abu Dhabi.

    Located 84 kilometres southwest of Abu Dhabi city, the Bab field has been in production since 1960 and is the emirate’s first oil-producing asset. The North East Bab cluster comprises the Al-Nouf, Rumaitha and Shanayel fields. 

    The Bab and North East Bab One Tie-In project is central to Adnoc Onshore’s contribution to Adnoc Group’s target of expanding crude oil production capacity to 5 million barrels a day (b/d) by 2027, an initiative known as the Accelerated Integrated Programme 5. The state energy company’s total production capacity currently stands at approximately 4.85 million b/d.

    According to industry sources, Adnoc Onshore has selected local contractor Robt Stone Middle East and China’s Jereh Group to carry out engineering, procurement and construction (EPC) works on the project. While both firms have been notified of their selection, a formal project kick-off meeting has yet to take place.

    Adnoc Onshore is understood to have started the tendering process for the Bab and North East Bab One Tie-In project last year, with contractors submitting technical and commercial bids earlier this year.

    Following the evaluation of bids, Adnoc Onshore sought best commercial offers from the bidders, which contractors submitted in May, MEED previously reported.

    The project budget is estimated at $1.2bn.

    Bidders for the contract are understood to have included:

    • Galfar Emirates (UAE branch of Oman’s Galfar Engineering & Construction)
    • Jereh (China)
    • Kalpataru Projects International (India)
    • Matrix Construction (UAE)
    • Robt Stone Middle East (UAE)
    • Target Engineering Construction Company (UAE)

    The project scope covers residual engineering, procurement of materials not supplied as free-issue items, site surveys, construction, installation, inspection, testing, and pre-commissioning and commissioning support. The works will deliver new wellsite facilities, including a new mini-pad, well bays and clusters across the Bab and North East Bab developments.

    Adnoc Onshore is Adnoc Group’s largest production subsidiary, accounting for roughly 2 million b/d of crude and about 7 billion cubic feet a day of associated gas from four primary onshore asset clusters: Bab, Bu Hasa, North East Bab and South East.

    ALSO READ:

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20951928/main.jpg
    Indrajit Sen
  • Ashghal tenders Al-Udeid air base access road works

    27 October 2026

     

    Qatar’s Public Works Authority (Ashghal) has invited contractors to bid on a contract to build roads and related infrastructure around Al-Udeid Air Base.

    The project is located in Zone 95 of Al-Wakra Municipality, adjacent to Al-Majd Road. 

    The tender was issued on 22 October, with a submission deadline of 22 November.

    The scope includes the construction of a dual-lane carriageway to improve access to the air base, together with three roundabouts. The alignment will connect to Al-Majd Road to the east and tie into Street 203 in Zone 95 to the west. The contractor will also resurface and maintain connections to the existing road network.

    Associated works include street lighting, intelligent transport systems, directional signage and a surface-water drainage collection system.

    The contractor will provide crossing ducts, protect and relocate conflicting existing utilities, and complete detailed utility designs as required by relevant stakeholders through the Qatar Design Review System.

    The project also includes the design and construction of two electrical substations. The contractor must secure the necessary stakeholder and authority approvals before starting these works.

    The scheme will be delivered on a remeasurable, build-only basis using designs approved by others. It will also include designated contractor-designed elements and design-and-build packages for the substations.

    Bidders must submit two commercial pricing options: a base offer subject to material price-fluctuation provisions, and an alternative authority option without such provisions.

    The contract has a 550-day completion period from the commencement date, including mobilisation, followed by a 400-day maintenance period after the completion certificate is issued.

    Participation is restricted to local and international contractors registered under the Ministry of Finance classification system in Grade A or Grade B for road specialisation.

    Unclassified foreign firms may submit equivalent certified documentation from their country of origin, attested by Qatari diplomatic missions. They must obtain Ministry of Finance registration before contract award.

    For joint-venture bids, the lead partner must hold the required classification grade.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950810/main.jpg
    Yasir Iqbal
  • Saudi Arabia gauges interest for Al-Ula wastewater expansion

    27 October 2026

     

    Saudi Arabia’s Royal Commission for Al-Ula (RCU) is conducting market sounding for the first phase of the Mughayra wastewater treatment plant (WWTP) expansion before formally starting its tendering process, according to industry sources.

    The project is valued at SR400m ($107m) and is intended to increase the Mughayra plant’s wastewater treatment capacity to 62,000 cubic metres a day.

    RCU is gauging interest from potential contractors and has not yet issued a prequalification questionnaire, a source said.

    The scheme forms part of Saudi Arabia’s broader investment drive to develop its cultural and tourism offering across Al-Ula.

    The commission launched its Journey Through Time Masterplan in April 2021, with implementation scheduled in three phases through 2035. The masterplan covers infrastructure development, water management and irrigation, alongside the regeneration of a 9-kilometre cultural oasis.

    French engineering firm Artelia previously noted in its 2025 annual corporate report that it is involved in the design phase of the Mughayra WWTP.

    RCU is also developing strategic potable-water storage infrastructure in Al-Ula, including a design-and-build project covering a 50,000-cubic-metre reservoir at Hub 06 and a 15,000-cubic-metre reservoir at Hub 08.

    Local contractor Bin Omairah previously confirmed that it is serving as the engineering, procurement and construction contractor for the storage facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950333/main.jpg
    Mark Dowdall
  • Qatari firm wins $147m Syria road deal

    27 October 2026

    Qatari contractor Al-Mohannadi for Roads, Trading & Contracting has signed a $147m contract with Syria’s General Directorate of Roads to rehabilitate and expand a 215-kilometre (km) highway corridor connecting to the Iraqi border.

    The project covers the rehabilitation and dualisation of a 170km section linking the Al-Busairi junction to the Al-Tanf border crossing, alongside the construction of a 45km link between the Al-Sabaa Biyar junction and Al-Busairi. Work is scheduled for completion within 900 days.

    The agreement was signed in Damascus by Moaz Najjar, director-general of the General Directorate of Roads, and Abdullah Adnan Al-Zattam, chief executive of Al-Mohannadi, in the presence of Syrian Transport Minister Yarob Badr and Finance Minister Mohammad Yusr Barnieh.

    The upgrade is intended to restore and expand one of Syria’s primary overland arteries to Iraq, which has suffered significant deterioration and capacity bottlenecks following years of conflict. The Al-Tanf corridor represents the most direct overland link between Damascus, central Syrian industrial centres and Baghdad.

    The project is designed to accommodate heavier commercial freight vehicles and reduce transit times between the two countries.

    The investment also forms part of broader efforts to re-establish Syria’s role as a regional transit corridor connecting Mediterranean ports with landlocked trade routes into Iraq and the wider region.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950332/main.gif
    Yasir Iqbal
  • Adnoc showcases $16.3bn local manufacturing potential

    27 October 2026

    Abu Dhabi National Oil Company (Adnoc Group) has identified more than AED60bn ($16.3bn) in local manufacturing opportunities through 2030.

    The Abu Dhabi energy company also announced changes to its procurement, supplier registration and In-Country Value (ICV) localisation frameworks.

    The measures were announced at the second Make it with Adnoc Forum, held in Abu Dhabi on October 25. They are intended to give manufacturers, suppliers and investors greater visibility of future demand and a faster, clearer route to compete for Adnoc contracts, the company said.

    The more than 200 manufacturing opportunities cover products required for Adnoc’s projects and operations, including:

    • Rotating equipment and power
    • Electrical, control and automation systems
    • Drilling and completion equipment
    • Chemicals and catalysts
    • Piping, fabrication and heavy equipment
    • Spare parts and advanced manufacturing

    Many of the identified products are currently imported, Adnoc said. “Manufacturing them in the UAE shortens lead times, reduces exposure to global supply disruptions and strengthens the resilience of Adnoc’s operations,” it said in its statement.

    Adnoc, the UAE Ministry of Industry & Advanced Technology and the Abu Dhabi Investment Office (Adio) will work together to connect manufacturers with these opportunities. The collaboration will combine visibility of Adnoc’s demand, access to the national industrial database and financing through the National Industrial Resilience Fund, the company said.

    Adnoc also signed two memorandums of understanding on the sidelines of the forum with Adio and Kezad Group.

    ICV scheme expansion

    Adnoc announced the expansion of its Local+ programme, part of its ICV framework, to more than 100 UAE manufacturers, compared with 70 at its launch in May. The programme gives UAE-made products priority in Adnoc projects by requiring engineering, procurement and construction (EPC) contractors bidding for new tenders to source relevant products from manufacturers approved under the programme.

    Separately, Adnoc announced a redesign of its supplier registration and prequalification process. The company is targeting a reduction of up to 80% in the time required for suppliers to complete the process and become eligible to compete for Adnoc opportunities.

    The new model halves the number of required documents and removes prequalification requirements for 60% of service categories.

    A single window brings together registration, qualification and compliance, with requirements tailored to the nature of the work and its level of risk. Artificial intelligence will support document verification and the reuse of existing data, reducing repetitive submissions and administrative processing.

    ALSO READ:
    Adnoc steps up crude oil capacity expansion
    Adnoc funnels billions into boosting gas processing

    “Adnoc’s enhanced ICV model will more closely connect procurement decisions with commercial value and suppliers’ contribution to the UAE economy. Under the new model, commercial and ICV offers will be integrated into a single evaluation model,” the company said.

    “The previous bid-matching approach will be retired, encouraging suppliers to submit their most competitive commercial and ICV offers from the outset. Requirements will be proportionate to contract size and scope.

    “The model also enhances the administration of ICV-related retention payments. Where retention applies, automated calculation and release processes through the Adnoc Supplier Hub will improve transparency, reduce manual follow-up and support suppliers’ cash flow as obligations are met.”

    Alongside the ICV and registration enhancements, Adnoc outlined a new commercial approach built around four strategic shifts: agile, competitive, strategic and forward-looking.

    “The approach will advance simpler procurement and faster decision-making, contracting models aligned with project and market dynamics, targeted commercial negotiations and earlier visibility of Adnoc’s future demand.”

    Since its launch in 2018, Adnoc’s ICV programme has directed more than AED307bn ($83.6bn) into the UAE economy, the company said. By the end of 2025, it had also supported the localisation of more than 130 products, the development of 95 UAE factories, and employment opportunities for more than 27,500 Emiratis at participating private sector companies.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20948385/main5518.jpg
    Indrajit Sen