Meed | Region to continue robust spending on oil and gas

Region to continue robust spending on oil and gas

29 December 2024

The upstream oil and gas industry in the Middle East and North Africa (Mena) region recorded more than $53bn of capital expenditure (capex) on oil and gas production projects in 2023.

It was forecast that the sector might never repeat that level of spending on engineering, procurement and construction (EPC) contracts, especially with hydrocarbons producers striving to achieve their net-zero carbon emissions goals and broader sustainability commitments.

Abu Dhabi National Oil Company (Adnoc) led capex on Mena production projects in 2023, largely due to its $17bn spending on the Hail and Ghasha offshore sour gas development project.

Saudi Aramco was the second-largest spender in the region in 2023, on the back of the estimated $10bn-worth of EPC contracts it awarded for the second expansion phase of its Jafurah unconventional gas development. It also maintained spending on offshore field upgrade works, awarding about $5.3bn-worth of engineering, procurement, construction and installation (EPCI) contracts.

Yet upstream project spending in 2024 year-to-date has surpassed 2023’s level, with Mena hydrocarbons producers collectively spending more than $58bn on oil and gas production capacity maintenance and expansion projects.

Record year

Iran emerged as the largest spender in the Mena upstream sector in 2024, with the country’s capex exceeding $22bn. State-owned Pars Oil & Gas Company spent $20bn on EPC contracts in March, on a project to boost gas output capacity at the South Pars field.

Iran shares the South Pars field with Qatar, where it is known as North Field. The natural gas reserve in the Gulf’s waters is estimated to hold 1,800 trillion cubic feet of gas and 50 billion barrels of condensates.

Pars Oil & Gas Company aims to produce 90 trillion cubic feet of gas and 2 billion barrels of condensates from the latest expansion phase of the South Pars field development. The company expects to generate $900bn in total revenues from the expansion project.

Qatar was the second-largest spender in the region in 2024, with state enterprise QatarEnergy advancing its North Field production sustainability (NFPS) project, which aims to support its liquefied natural gas (LNG) expansion programme with gas feedstock.

QatarEnergy LNG, a subsidiary of QatarEnergy, awarded Italian contractor Saipem an estimated $4bn EPCI contract in September as part of the second phase of its NFPS project.

Saipem was awarded two packages, the scope of which encompasses EPCI work on a total of six platforms, approximately 100 kilometres (km) of corrosion resistance alloy rigid subsea pipelines of 28-inches and 24-inches diameter, 100km of subsea composite cables, 150km of fibre optic cables and several other subsea units.

Separately, in January, Qatar’s North Oil Company awarded $6bn-worth of contracts for four engineering, procurement, construction, installation and commissioning packages on a project to increase oil production from its Al-Shaheen offshore oil field by about 100,000 barrels a day (b/d).

The project, known as Ruya, is the third capacity-expansion phase of the Al-Shaheen oil field, which has a production potential of 300,000 b/d at present. North Oil Company – a joint venture of QatarEnergy (70%) and France’s TotalEnergies (30%), which has been the operator of Al-Shaheen since July 2017 – aims to increase the field’s output through the Ruya project.

Saudi offshore spending

In late January 2024, the Saudi Energy Ministry directed 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, Aramco cancelled the tendering process for at least 15 tenders involving the EPCI of structures at offshore oil and gas fields.

Since that decision, however, Aramco has gone the other way, spending an estimated $4.5bn in 2024 on offshore EPCI contracts, known in the Aramco ecosystem as CRPOs.

Saipem has been the biggest beneficiary of Aramco’s offshore spending, winning all of the CRPOs awarded in 2024. In early May, Aramco awarded the contractor 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 firm then scooped three major CRPOs in August, starting with CRPOs 132 and 139, the combined value of which is estimated to be about $1bn. In early 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 later, Aramco awarded Saipem CRPO 127, a $2bn contract that involves 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.

Jafurah development

Aramco has also made swift progress in 2024 on successive expansion phases of its programme to produce and process gas from the Jafurah unconventional development in Saudi Arabia. Spending on the Jafurah expansion projects, along with offshore contracts, helped to make the kingdom the third-biggest upstream spender in the Mena region.

Aramco awarded contracts on 30 June for the Jafurah second expansion phase, which aims to raise processing potential to up to 2 billion cubic feet a day (cf/d) of raw gas. Aramco awarded 16 contracts, worth about $12.4bn, for EPC works and drilling services for the second expansion phase.

Within weeks of those awards, a consortium of Spanish contractor Tecnicas Reunidas and China’s Sinopec Group announced that it had been selected by Aramco to carry out EPC works on the third expansion phase at Jafurah, worth $2.24bn. The EPC scope mainly covers building three gas compression plants, each capable of processing 200 million cf/d. Aramco officially awarded the contract to the Tecnicas Reunidas/Sinopec consortium in late September.

Capex to hold steady

While the Mena upstream oil and gas industry may not be able to match its 2024 level of project capex in 2025, the sector is expected to maintain a robust level of spending, especially with national energy companies striving to achieve their strategic long-term oil and gas production capacity goals before the end of the decade.

Data from regional projects tracker MEED Projects suggests that the Mena upstream sector could invest about $40bn on projects in 2025, with gas output expansion schemes predicted to dominate spending.

In line with its target to increase gas production by 60% by 2030, with 2021 as its baseline, Aramco is on course to further advance its Jafurah unconventional gas production programme. It issued the main EPC tender for the fourth expansion phase of the programme in July, within days of selecting the main contractors for the third phase.

Contractors are preparing bids for the project, the scope of which is similar to that of the third expansion phase, and which is therefore understood to be valued at $2.5bn.

Saudi Arabia’s spending on offshore brownfield and greenfield EPCI contracts is set to remain high, with the tendering process under way for eight more Aramco CRPOs.

Four tenders were issued in August for CRPOs 149, 150, 152 and 153, which cover the EPCI works on the Arabiyah, Hasbah and Marjan offshore oil field developments. Of the four CRPOs, contractors in Saudi Aramco’s Long-Term Agreement (LTA) pool have submitted bids for 149, 152 and 153.

Separately, LTA contractors are also preparing bids for four tenders worth a total of $4bn, which will further expand the Zuluf offshore field development.

Meanwhile, Iran is expected to give shape to its plan for gas extraction from its North Pars field, along with raising output from its onshore and offshore oil fields. Increasing production is vital for Tehran in order to maintain steady volumes of exports to earn vital revenue for its economy, which has been crippled by years of international sanctions.

Pars Oil & Gas Company is estimated to have allocated $15bn to the North Pars gas field development project. However, with the project being in the study phase, and with Iran’s cash-strapped government barely able to provide support to its population, the scheme could see little to no progress in 2025.

In the UAE, with the deadline approaching for Adnoc’s target of raising crude output capacity to 5 million b/d by 2027, it is anticipated that the company will funnel billions of dollars into increasing the production potential of its onshore and offshore oil fields.

Adnoc Group subsidiary Adnoc Offshore is evaluating bids for three packages of a multibillion-dollar project to boost oil production at the Lower Zakum offshore hydrocarbons concession in Abu Dhabi. The goal of the first phase of the Lower Zakum long-term development plan is to raise the asset’s output capacity to 520,000 b/d by 2027 and maintain that level until 2034.

Adnoc Offshore has also started the tendering exercise for front-end engineering and design work on the second expansion phase of the Umm Shaif offshore oil field.

Another Adnoc Group subsidiary, Adnoc Onshore, has made a significant capex investment in growing crude output from its main Bab, Northeast Bab, Bu Hasa and Southeast fields. As a result, it is on course to award more contracts in 2025 to maintain and eventually increase output from these fields through its P5 projects, which aim to achieve an oil production potential of 5 million b/d by 2027.

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Indrajit Sen

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Jedco maps next phase of Jeddah airport expansion
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Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Yasir Iqbal

Contractor wins $105m Medina university hospital deal

22 September 2026

Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

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:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

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

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Oman tenders Thumrait Industrial City infrastructure
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Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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Kuwait halves drilling contractor pool
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State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
- Burgan Company for Well Drilling, Trading & Maintenance (Kuwait)
- Kuwait Drilling Company (Kuwait)
- Sun Drilling Kuwait (Kuwait)
- TDL Kuwait for Oil Rigs & Natural Gas Extraction Activities, Services and Facilities (Kuwait)
- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
- Adnoc Drilling Company (UAE)
- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
- CNPC Bohai Drilling Engineering Company (China)
- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.