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Region puts its priorities first

30 April 2024

Commentary
Colin Foreman
Editor

Read the May 2024 issue of MEED Business Review

Contractors enjoyed a record year in 2023. In the GCC, there were $205bn of deals signed. The best total on record was achieved largely due to high levels of activity across all major markets.

At the start of this year, hopes were high that new records would be set again in 2024. Those aspirations look like they may be realised. According to regional projects tracker MEED Projects, by the end of the first quarter of this year there had been $47bn of awards in the GCC, some $10bn more than the $37bn of awards during the same period of 2023.

The strong start to the year comes despite some tempering of project ambitions, most notably in the region’s largest market, Saudi Arabia. In January, the kingdom’s Energy Ministry instructed Saudi Aramco to halt plans to increase its production capacity to 13 million barrels of crude oil a day.

The negative impact of that decision on the projects market, will be offset by gas projects. Gas is considered a vital transition fuel, and strong global demand growth is allowing Gulf producers to develop new projects worth billions of dollars each and consolidate their position as the world’s leading gas exporter. The best example is the $7.7bn of engineering, procurement and construction contracts awarded by Saudi Aramco in early April to expand the Fadhili gas plant.

For the construction sector, there has been a prioritisation of construction work for Saudi Arabia’s gigaprojects. As construction work in the kingdom ramps up, developers are focusing efforts on delivering the components of their projects that they consider to be a strategic priority, and are scaling back work on other elements.

Developers are also more proactively seeking external investment to help ease the spending burden of their vast projects.

As we move deeper into 2024, the key question will be whether these priority projects will be sufficient to achieve another record year. Unlike 2023, not everything is moving ahead, but very large projects are still proceeding.

Must-read sections in the May 2024 issue of MEED Business Review include:

> AGENDA: Region boosts LNG spending; Gulf players secure future of LNG projects

> CURRENT AFFAIRS: ​Algerian downstream sector faces setback; Progress on Kuwait oil mergers is overdue; Iranian attack on Israel rattles globe

INDUSTRY REPORT:
MEED’s GCC Contractor Rankings for 2024 
> Construction step change boosts order books

> SOUTH KOREA: South Korean appetite for Saudi projects grows

> IRAQ: Iraq remains tough to sell

> INTERVIEWS: Saudi Arabia's Hail capitalises on heritage; Northern emirates’ energy transition gathers pace

> GAS SPENDING: Aramco in hot pursuit of 2030 gas production goal

> UAE MARKET REPORT:

> COMMENT: Non-oil activity underpins UAE economy
> GVT & ECONOMY: Non-oil activity underpins UAE economy
> BANKING: UAE banks seize the moment
> UPSTREAM: Adnoc oil and gas project spending sees steep uptick
> DOWNSTREAM: UAE builds its downstream and chemical sectors
> POWER: UAE marks successful power project deliveries
> WATER: Dubai tunnels project dominates UAE pipeline
> DUBAI CONSTRUCTION: Dubai real estate boosts construction sector
> ABU DHABI CONSTRUCTION: Abu Dhabi makes major construction investments

> MEED COMMENTS: 
> Gulf of Aqaba moves beyond Instagram
> Net zero steps need recalibration
> Flooding spotlights Dubai construction
> Funding impacts Saudi projects

> GULF PROJECTS INDEX: Saudi market returns to growth

> MARCH 2024 CONTRACTS: Iran gas contract boosts value of deals signed

> MARKET SNAPSHOT: Mena data centre projects

> OPINION: Rainmaking in the world economy

> BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

To see previous issues of MEED Business Review, please click here
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Colin Foreman

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