meed-logo

line1 line2 line3
SIGN IN / REGISTER

Offshore oil and gas sees steady capex

6 March 2025

 

This package also includes: Saudi Arabia to retain upstream dominance

With nearly half of the Middle East and North Africa’s (Mena) hydrocarbons reserves located in offshore basins, regional oil and gas producers spend significantly on maintaining and ramping up production levels. Offshore projects are predominantly geared at raising drilling capabilities, expanding subsea infrastructure and building floating production systems.

In addition to boosting production capacity, producers also invest in offshore projects to improve technological innovation, safety and environmental sustainability. 

Capital expenditure (capex) on offshore projects in the region has remained steady in the past 10 years, with 2024 being one of the best years on record, witnessing total project spending of $23.5bn.

Qatar’s offshore goals

Qatar accounted for the largest capex on offshore oil and gas projects in Mena last year, according to data from regional projects tracker MEED Projects. The country invested more than $12bn in projects to produce incremental volumes of gas from its North Field reserve, as well to sustain its crude output.

In January 2024, North Oil Company awarded $6bn-worth of engineering, procurement and construction (EPC) contracts for a third capacity expansion project at the Al-Shaheen offshore field, to boost oil production by about 100,000 barrels a day (b/d).

North Oil Company – a joint venture of state enterprise QatarEnergy (70%) and France’s TotalEnergies (30%) – has been operating the Al-Shaheen field since July 2017. Situated 80 kilometres (km) north of Ras Laffan, at a water depth of 60 metres, Al-Shaheen holds one of the biggest oil reserves in the world and is Qatar’s largest field. It has a production potential of 300,000 b/d and accounts for about 45% of the country’s total oil production.

Meanwhile, Qatar’s North Field liquefied natural gas (LNG) expansion requires state enterprise QatarEnergy to pump large volumes of gas from the North Field offshore reserve to feed the three phases of the $30bn-plus programme. QatarEnergy has invested billions of dollars in EPC works on the two phases of the North Field Production Sustainability (NFPS) project, which aims to maintain steady gas feedstock for the North Field LNG expansion phases.

QatarEnergy LNG, a subsidiary of QatarEnergy, awarded Italy’s Saipem an order valued at $4bn for combined packages Comp3A and Comp3B of the NFPS Offshore Compression Programme’s second phase in September last year. The scope of work on the packages encompasses the engineering, procurement, construction and installation (EPCI) of six platforms, approximately 100km of 28-inch- and 24-inch-diameter corrosion-resistant alloy rigid subsea pipelines, 100km of subsea composite cables, 150km of fibre optic cables and several other subsea units.

The job for combined packages Comp3A and Comp3B is Saipem’s latest contract award as part of the NFPS scheme. The Italian contractor has secured work totalling almost $6bn on the two phases of the project.

UAE pushes offshore

With Abu Dhabi National Oil Company (Adnoc Group) striving to attain an oil production capacity of 5 million b/d by 2027 and become self-sufficient in gas production by the end of this decade, offshore oil and gas projects have received a significant boost. Adnoc was the second-highest spender on offshore projects in the region last year, as well as in the past 10 years. 

In 2024, Adnoc Group subsidiary Adnoc Offshore spent about $6bn on major programmes to potentially increase oil production, such as the two phases of a project to raise output from the Upper Zakum offshore concession in Abu Dhabi to 1.2 million b/d.

In April last year, Adnoc Offshore awarded the project’s main EPC contract – known as UZ 1.2MMBD EPC-1 and worth $825m – to UAE-based Target Engineering Construction Company. In November, Target also won the contract for the project’s next phase, known as UZ 1.2MMBD EPC-2, which is understood to be valued at $500m.

Also last year, Adnoc Offshore awarded a contract, estimated to be worth $2bn, for a project to increase production from the Umm Shaif offshore oil field in Abu Dhabi. 

US-based oil and gas contractor McDermott International won the main contract for the Umm Shaif Accelerated Development project, which aims to increase the Umm Shaif oil field’s output from about 275,000 b/d to 390,000 b/d by 2027, and to sustain that level of production until at least 2036.

Aramco maintains capex

In January 2024, the Saudi Energy Ministry directed Saudi Aramco to abandon its campaign to expand its oil production spare capacity from 12 million b/d to 13 million b/d by 2027. As a consequence of that government decision, Aramco cancelled the tendering process for at least 15 schemes involving the EPCI of structures at offshore oil and gas fields. 

Aramco has since changed tack, spending an estimated $5bn in 2024 on offshore EPCI contracts and earning third place in the league table of highest offshore spenders in the Mena region last year. 

Saipem was the biggest beneficiary of Aramco’s offshore spending, winning five of the eight Contracts Release and Purchase Orders (CRPOs) awarded last year.

In May, Aramco awarded Saipem the contract for CRPO 143, which involves replacing an oil line between the Berri and Manifa oil fields in the kingdom’s Gulf waters.

Aramco then awarded Saipem the contract for CRPO 138, which involves laying a trunkline at the Abu Safah offshore field. The contract is estimated to be worth $500m.

The Milan-listed contractor then scooped three CRPOs in August, starting with CRPOs 132 and 139, the combined value of which is estimated to be about $1bn. In September, Saipem began work on the two contracts, which involve the EPCI of structures to upgrade the Marjan, Zuluf and Safaniya offshore field developments.

Just days after the award of CRPOs 132 and 139, Aramco awarded Saipem CRPO 127, a $2bn contract that involves the EPCI of topsides and jackets for wellhead platforms, a tie-in platform jacket and topside, rigid flowlines, submarine composite cables and fibre optic cables at the Marjan oil and gas field.

In late November, Aramco awarded three further CRPOs worth more than $500m. China Offshore Oil Engineering Company won CRPOs 149 and 152, which are estimated to be valued at $30m and $250m-$300m, respectively. UK-based Subsea7 secured CRPO 153, which is understood to be valued at $200m-$250m.

Positive outlook

Regional national oil companies, particularly those in the Gulf, will seek to maintain a steady stream of investment in offshore projects this year, capitalising on the favourable oil price environment in pursuit of their goal of ramping up output potential in the mid to long term.

Their international counterparts are also likely to press ahead with projects to derive maximum value out of their offshore hydrocarbons assets in the Mena region, a large portion of which are located in prolific, shallow-water formations, making the production of oil and gas more cost-effective than in other regions.

Capex on offshore oil and gas projects this year may well match the level seen in 2024, according to MEED Projects data. In the first two months of 2025, offshore EPC contract awards reached $7.5bn.

Adnoc Offshore accounts for that entire spend through its Lower Zakum Long-Term Development Plan (LTDP-1) project. The company’s long-term objective is to raise output capacity at the Lower Zakum offshore hydrocarbons concession in Abu Dhabi to 520,000 b/d by 2027 and maintain that level until 2034.

Spanish contractor Tecnicas Reunidas and Abu Dhabi-based contractors NMDC Energy and Target Engineering Construction Company have been selceted by Adnoc Offshore to execute EPC works on the three main packages of the Lower Zakum LTDP-1 project.

Separately, Aramco is in the bid evaluation and tendering stages with a total of 12 more CRPOs. The biggest of these offshore tenders are a set of four CRPOs – numbers 145, 146, 147 and 148 – that are part of a project to further expand the Zuluf offshore field development.

These four CRPOs, estimated to be worth about $5.8bn, involve the EPCI of several structures at the Zuluf field, to maintain and raise its long-term oil and gas production potential.

In addition to CRPOs 145, 146, 147 and 148, entities in Saudi Aramco’s Long-Term Agreement (LTA) pool of offshore contractors submitted bids last year for CRPO 150 – an estimated $50m tender that involves the installation of structures at Aramco’s Northern Area Oil Operations.

In December, Aramco issued seven more CRPOs – 154, 155, 156, 157, 158, 159 and 160 – for which its LTA contractors are in the process of preparing bids. Work on these tenders relates to EPCI on structures at several offshore oil and gas fields in Saudi Arabia.

Aramco has been the biggest spender on offshore oil and gas projects in the region in the past 10 years, with capex exceeding $48.5bn. The world’s largest company is predicted to spend significantly on offshore EPC projects in 2025, too.

Saudi Arabia to retain upstream dominance

https://image.digitalinsightresearch.in/uploads/NewsArticle/13451668/main.gif
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • Seven bid for Bahrain highway upgrade

    21 September 2026

    Register for MEED’s 14-day trial access 

    Seven contractors have submitted bids for the next phase of the Sheikh Jaber Al-Ahmed Al-Sabah Highway upgrade project.

    According to results published by the Bahrain Tender Board, the firms that have submitted bids include:

    • Nass Contracting Company
    • Haji Hassan Group
    • Almoayyed Contracting Group
    • Mohammed Abdulmohsen Al-Kharafi & Sons
    • Eastern Asphalt & Concrete Production
    • Cebarco Bahrain
    • Kingdom Asphalt

    The contract scope includes expansion works on 2 kilometres of the highway. It consists of a four-lane dual carriageway with service roads on both sides.

    The scope of works also includes excavation and backfill work, construction of stormwater drainage networks, a pumping station, installation of ducts for future utilities, upgraded street lighting, traffic signs and directional signage.

    The project aims to improve traffic capacity, reduce congestion and enhance safety along the transport corridor linking Manama with industrial zones.

    In April, MEED reported that Bahrain had approved a financing agreement framework to fund the construction of the next phase of the Sheikh Jaber Al-Ahmed Al-Sabah Highway upgrade.

    In March last year, the Kuwait Fund for Arab Economic Development and the Bahraini government signed a KD10m ($32.4m) loan agreement to fund the second phase of the project, which is expected to cost about $404m.

    This was followed in September 2025 by the appointment of US-based Parsons Corporation on a $1.5m contract to provide pre-contract engineering consultancy services for the project.

    According to data from regional project tracker MEED Projects, construction of the first phase was completed in 2020.

    A joint venture of local firm Nass Contracting and Kuwait’s KCC Engineering & Contracting undertook the main construction works.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19847073/main.png
    Yasir Iqbal
  • Oman reveals Sohar airport and Salalah Thumrait Road plans

    21 September 2026

    Oman is planning a new passenger terminal at Sohar Airport to expand regional air connectivity and strengthen the airport’s role in the national aviation network.

    According to Said Bin Hamoud Al-Maawali, Oman’s minister of transport, communications and information technology, new routes are expected to be announced before the end of the year. Potential destinations include Dammam in Saudi Arabia, Gwadar in Pakistan, and southern Iran.

    The planned terminal and additional routes will give residents of northern Oman more travel options.

    Al-Maawali also provided an update on the long-delayed Salalah-Thumrait truck road, saying the project will be procured through a conventional tendering model rather than a public-private partnership (PPP).

    In August 2023, Oman shortlisted five of eight prequalified teams to compete for the Salalah-Thumrait truck road project, which was set to be the sultanate’s first PPP road project.

    The 67-kilometre road project is specially designed for heavy vehicles. 

    The road is a key link in Dhofar’s transport network, connecting Thumrait with Salalah and supporting movement between the interior and the governorate’s main urban and economic centre.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19794881/main.jpg
    Yasir Iqbal
  • ADES completes acquisition of Saipem’s Saudi drilling business

    18 September 2026

    Register for MEED’s 14-day trial access 

    Al-Khobar-based ADES Holding Company has completed a transaction to acquire Italian oil and gas contractor Saipem’s shallow-water drilling subsidiary based in Saudi Arabia.

    Under the deal, ADES Saudi, an indirect subsidiary of Saudi Stock Exchange (Tadawul)-listed ADES Holding, will acquire Saudi Arabian Saipem, which operates a fleet of five jack-up rigs.

    The fleet includes three owned rigs – Perro Negro 7, Perro Negro 8 and Perro Negro 10 – as well as two leased rigs, Perro Negro 11 and Perro Negro 13. Four of the acquired rigs operate in Saudi Arabia, while Perro Negro 10 operates in Mexico under a charter structure and retains a valid contract in Saudi Arabia.

    ADES began the transaction to acquire Saudi Arabian Saipem in June, when it was estimated to be valued at about $285m. The deal was structured on a debt-free, cash-free basis, which was to be settled entirely in cash upon closing.

    Following completion, ADES operates a fleet of 128 units, comprising 88 offshore units – including 51 premium units – and 40 onshore rigs.

    The transaction also marks ADES’ entry into Mexico, extending the company’s international footprint to 21 countries, and adds approximately SR3.7bn ($992.9m) in backlog as of the completion date.

    The purchase of Saudi Arabian Saipem by ADES Holding follows the company’s takeover of Dubai-based, Oslo-listed Shelf Drilling in November last year, in a transaction valued at $379m. Following the completion of the cash merger, Shelf Drilling was wholly delisted from the Oslo Stock Exchange.

    The combined Shelf Drilling-ADES entity has been operating as a global player in shallow-water drilling in the world’s most prolific basins, with a fleet of 83 offshore jack-ups, including 46 premium jack-ups and 40 onshore rigs. The acquisition expanded ADES Holding’ global footprint from 13 to 19 countries, allowing entry and deeper operational integration into Southeast Asia, India, West Africa, the North Sea and the broader Mediterranean.

    Saudi Arabian Saipem generated revenues of SR636m ($170m) in 2025, highlighting the scale of the business being transferred.

    The divestment aligns with Saipem’s broader industrial strategy of reducing exposure to mature shallow-water drilling markets and concentrating resources on deepwater and harsh-environment offshore projects, where technical complexity and barriers to entry are generally higher.

    These segments have attracted growing investment in recent years as operators pursue offshore developments in regions such as the North Sea, Brazil, West Africa and the US Gulf of Mexico.

    For ADES, the acquisition further expands its presence in the Middle East offshore drilling market, particularly in Saudi Arabia, one of the world’s largest offshore jack-up rig markets, driven by activity from Saudi Aramco.

    Saipem previously said proceeds from the transaction will be used in accordance with the objectives outlined in its industrial plan. The Milan-listed company was advised on the transaction by Moelis & Company as financial adviser and Clifford Chance, together with AS&H Clifford Chance, as legal counsel.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19795697/main5616.jpg
    Indrajit Sen
  • SAR tenders design review consultancy for GCC rail link

    18 September 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia Railways (SAR) has issued a request for proposals (RFP) for a design management and review consultant to oversee engineering works on the GCC railway network, the latest step in advancing the long-delayed regional rail link.

    The RFP was issued on 9 September, with a submission deadline of 18 October.

    The tender seeks a consultant to manage, audit and verify deliverables produced by SAR's separately appointed design services consultant, rather than carry out the design itself. The tendering for the design services consultancy is currently in progress.

    Construction will be tendered separately through competitive bidding once designs are approved.

    The GCC railway will run for about 672 kilometres (km) inside Saudi Arabia, linking the kingdom's existing network to Kuwait, Qatar, the UAE and Bahrain, with four sections of about 141km, 200km, 151km and 21km, respectively.

    The line is planned as a single-track, non-electrified corridor for mixed freight and passenger traffic, with a maximum axle load of 32.4 tonnes and passing loops for bidirectional working.

    The appointed consultant will develop a design management and review plan covering governance, interdisciplinary coordination and stage-gate approvals, and will issue formal review and audit reports against SAR's requirements and international standards.

    The scope also covers stakeholder engagement, interface management and oversight of land acquisition activity tied to the design consultant's land acquisition plan.

    Key design stages are expected to take about 16 months: four months for concept design, six for preliminary design and six for issued-for-construction design, each with four weeks of contingency.

    SAR has asked bidders to mobilise a core team from day one. These must include a project director, engineering and design manager, stakeholder manager and lead document controller, all based at SAR's offices, with minimum experience thresholds ranging from three years for junior operators up to 25 years, including 15 in rail, for the project director role.

    GCC railway line

    Under the overall plan, the railway will run from Kuwait, pass through Dammam in Saudi Arabia, reach Bahrain via a planned causeway, and continue from Dammam to Qatar, the UAE and, ultimately, Muscat via Sohar in Oman. The railway is reported to cover about 2,186km in total.

    The route length within each member state is as follows:

    • UAE – 684km
    • Saudi Arabia – 672km
    • Oman – 306km
    • Qatar – 283km
    • Kuwait – 145km
    • Bahrain – 36km

    The railway is designed for passenger trains travelling at 220 kilometres an hour (km/h) and freight trains operating at 80km/h–120km/h.

    With high levels of project activity, governments in spending mode and renewed cooperation under the Al-Ula Declaration, the latest efforts to restart the GCC railway project may make more progress than previous attempts. If completed, the railway could prove transformational for a region that is globally connected but still divided by national borders.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19783331/main.gif
    Yasir Iqbal
  • Tender issued for Libyan gas project

    17 September 2026

    An invitation to bid has been issued for a contract to conduct environmental assessments for the project to expand the Mellitah oil and gas complex in Libya.

    The bid submission deadline is 2pm today (17 September) Libyan time.

    The scope of the project includes provision of:

    • An environmental baseline study (EBS)
    • An environmental impact assessment (EIA)
    • An environmental management plan (EMP)

    The client is Mellitah Oil & Gas (MOG), which is a joint venture of Italy’s Eni and Libya’s National Oil Corporation (NOC).

    MOG is based in Tripoli and operates both onshore and offshore oil and gas facilities.

    The joint venture owns and operates six major oil and gas fields across the North African country.

    According to the tender documents, the company that is awarded the contract will need to prepare environmental management measures in compliance with:

    • Libyan environmental legislation
    • Ministry of Environment requirements
    • NOC environmental guidelines
    • Applicable international environmental standards and best practices

    The expansion of the Mellitah oil and gas complex is part of a project estimated to be worth $8bn.

    The wider project is known as the Mellitah Complex Expansion & CO2 Management Integrated Development Project.

    It has six main packages:

    • Onshore package
    • Offshore Structure A
    • Offshore Structure E
    • Subsea pipeline package
    • Site preparation work
    • Carbon capture and storage facility

    Security issues and political instability have been a major problem for Libya’s oil and gas sector since the country’s civil war started in 2011.

    Earlier this month, the Mellitah oil and gas complex was forced to shut down temporarily due to a protest over deteriorating public services.

    The existing onshore complex includes housing, processing units, storage facilities and export facilities.

    It also serves as the launch point for the Greenstream pipeline, which delivers Libyan gas directly to Italy.

    The planned expansion of the complex will involve:

    • Construction of a new fourth gas processing train
    • Construction of a third condensate train
    • Construction of a third natural gas liquids fractionation train
    • Construction of a fourth sulphur recovery unit train
    • Installation of a hydrogen sulphide enrichment unit
    • Installation of a sulphur recovery unit
    • Construction of other associated facilities

    The Mellitah complex is located about 100 kilometres west of Tripoli and is a key energy facility in the west of the country.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19748920/main.png
    Wil Crisp