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.
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
Houthi truce collapse widens Gulf risk map15 July 2026
-
Saudi Downtown awards Al-Khobar infrastructure deal15 July 2026
-
Saudi Arabia opens third round of gas-fired IPPs15 July 2026
-
-
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Houthi truce collapse widens Gulf risk map
15 July 2026
Register for MEED’s 14-day trial access
The Houthis’ declaration ending the de facto truce with Saudi Arabia has significantly increased the likelihood of renewed attacks on Red Sea shipping and regional infrastructure, broadening the threat environment beyond the Strait of Hormuz.
S&P Global Market Intelligence says the 13 July exchange is best understood as a potential widening of the renewed US-Iran escalation cycle into the Yemen and Red Sea theatres.
Houthi claims that Saudi Arabia was responsible for a strike on Sanaa International airport have not been independently confirmed. Saudi Arabia had not formally commented at the time the analysis was written.
The Yemeni militant group is likely to use the incident as a trigger that allows it to justify renewed military action while aligning with Iran’s wider effort to impose costs on US and Gulf interests, according to the research firm.
The decision to declare an end to de-escalation with Riyadh materially increases the likelihood of further missile and unmanned aerial vehicle (UAV) activity against infrastructure near the Yemen-Saudi border, as well as renewed pressure on maritime routes in the Red Sea and Bab Al-Mandab.
Aviation exposure
The resumption of direct hostilities broadens the range of vessels and ports likely to be subject to Houthi targeting, and presents severe risk to airports and stationary aircraft, S&P Global Market Intelligence says.
While the Houthis would probably not intentionally down civilian aircraft, there is a significant risk to aircraft in flight, particularly at lower altitudes close to airports, due to incoming UAVs and missiles and interceptor activity.
The broader risk is to regional logistics rather than any single target set, the analysis says.
If escalation around the Strait of Hormuz coincides with renewed Houthi activity in the southern Red Sea, Bab Al-Mandab and the Gulf of Aden, commercial operators face a more complex dual-chokepoint environment, with the added likelihood that the Houthis will seek to target Hormuz bypass infrastructure across the Gulf.
That would raise the likelihood of shipping delays, higher insurance costs, more conservative routing decisions and greater interest in alternative corridors or bypass routes.
https://image.digitalinsightresearch.in/uploads/NewsArticle/17680608/main.jpg -
Saudi Downtown awards Al-Khobar infrastructure deal
15 July 2026
Register for MEED’s 14-day trial access
Saudi Downtown Company, a wholly owned subsidiary of the Public Investment Fund (PIF), has awarded a contract for infrastructure works in downtown Al-Khobar.
The contract was awarded to local contractor Ansab General Contracting Company.
The scope of work includes the design and development of overall infrastructure, road networks and street lighting for the downtown Al-Khobar project.
Saudi Downtown Company was officially launched in 2022 by Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud, who is also chairman of PIF.
At the time, the company announced plans to develop downtown areas in 12 cities across the kingdom: Medina, Al-Khobar, Al-Ahsa, Buraidah, Najran, Jizan, Hail, Al-Baha, Arar, Taif, Dumat Al-Jandal and Tabuk.
SDC’s mandate is to develop more than 10 million square metres of land across its projects
https://image.digitalinsightresearch.in/uploads/NewsArticle/17677176/main.jpg -
Saudi Arabia opens third round of gas-fired IPPs
15 July 2026
Register for MEED’s 14-day trial access
Principal buyer Saudi Power Procurement Company (SPPC) has opened the qualification process for the third round of conventional independent power projects (IPPs) using combined-cycle gas turbine (CCGT) technology.
The round is being tendered under the supervision of the Ministry of Energy. Each plant will be built with provision for carbon capture unit readiness, allowing the technology to be deployed at a later stage.
Each project will be developed on a build-own-operate (BOO) basis, with the winning consortium taking 100% equity in a special purpose vehicle (SPV) set up to develop and operate the plant.
Each SPV will sign a power purchase agreement with SPPC, which is licensed by the Saudi Electricity Regulatory Authority (SERA) to prepare preliminary studies, tender and award IPPs, and purchase electricity from energy projects in the kingdom.
The programme forms part of Saudi Arabia’s Circular Carbon Economy approach, which underpins the energy sector element of the Vision 2030 strategy. Riyadh is displacing liquid fuels with natural gas in power generation to cut emissions intensity, while designing new plants so that carbon capture equipment can be retrofitted in support of national emissions targets.
In April, Acwa and Saudi Energy (formerly Saudi Electricity Company) signed a 31-year power purchase agreement (PPA) with SPPC for the Rabigh 2 IPP expansion.
The project involves the development of a CCGT plant in the Mecca region. It will have a total capacity of 2,313.5MW.
The contract is valued at SR11.5bn ($3.07bn), the companies said in separate stock exchange filings.
https://image.digitalinsightresearch.in/uploads/NewsArticle/17676286/main.jpg -
Dubai selects contractor for Al-Maktoum airport people mover
15 July 2026
Register for MEED’s 14-day trial access
Dubai Aviation Engineering Projects (DAEP) has selected a contractor to deliver the automated people-mover system as part of the first phase of the $35bn expansion of Al-Maktoum International airport.
A team of Japan’s Mitsubishi Corporation and Indian contractor Larsen & Toubro is the selected contractor.
The automated people-mover system will serve as a critical facility for operations at Al-Maktoum International airport. The system will run under the apron of the entire airfield and the airport’s terminals. It will consist of multiple tracks, taking passengers from the terminals to the concourses.
Four underground stations will be built as part of the first phase. The overall plan includes 14 stations across the airport.
The firms submitted the bids for the project in July last year, as MEED exclusively reported.
The contract is the latest in a series of awards signed by DAEP recently. DAEP has awarded contracts valued at about AED13bn, with construction works currently under way on several airport packages.
These include enabling works, the second runway, and the initial structural foundations for passenger terminals and gates.
Upcoming awards
In June, DAEP said that it will award contracts worth over AED55bn ($15bn) by the end of this year for construction works at Al-Maktoum International airport.
The projects slated for contract awards include the substructure works for the Western Passenger Terminal, the fourth aircraft concourse building and the baggage handling system, in addition to the superstructure works for the Western Passenger Terminal and the first, second and third aircraft concourses.
The packages also encompass long-span structural frameworks for buildings covering about 1.5 million square metres (sq m), infrastructure works for the southern airfield area, and power generation and district cooling plants supporting the construction programme.
The award of the facade and roofing packages is also planned for this year.
Construction progress
In May last year, MEED exclusively reported that DAEP had awarded a AED1bn ($272m) deal to UAE firm Binladin Contracting Group to construct the second runway at the airport.
The enabling works on the terminal were awarded to Abu Dhabi-based Tristar E&C.
Construction on the project’s first phase is expected to be completed by 2032.
Construction on substructure works began in November last year, when DAEP formally selected a contractor to deliver the package.
The government approved the updated designs and timelines for its largest construction project in April 2024.
In a statement, the authorities said the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International within 10 years.
According to an official description on DAEP’s website, the expanded airport’s West Terminal will be a seven-level, 800,000 sq m facility with an annual capacity of 45 million passengers.
It will be the second of three terminals at Al-Maktoum International airport.
In September 2024, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead masterplanning and design consultants on the expansion of Al-Maktoum airport.
The airport’s construction is planned to be undertaken in three phases. The airport will cover an area of 70 square kilometres south of Dubai and will have five parallel runways and 430 aircraft gates.
It will be five times the size of the existing Dubai International airport and will have the world’s largest passenger-handling capacity of 260 million passengers a year. For cargo, it will have the capacity to handle 12 million tonnes a year.
https://image.digitalinsightresearch.in/uploads/NewsArticle/17674721/main.png -
Chinese contractor wins Kuwait investment authority HQ
15 July 2026
Register for MEED’s 14-day trial access
Beijing-headquartered China State Construction Engineering Corporation (CSCEC) has won a contract to build the permanent headquarters of the Kuwait Direct Investment Promotion Authority (KDIPA).
The contract covers the construction of a 275-metre, 55-storey office tower located in Kuwait City’s Sharq district. The project is expected to be completed by 2028.
According to results published on the Kuwait Central Agency for Public Tenders (Capt) website, the firm initially submitted a bid of $233m, as MEED reported in January. The tender was issued on 19 October 2025 and bids were submitted on 18 November, MEED reported.
The contract is the latest in a series of high-profile projects signed by CSCEC in the GCC region this year. Last month, it won a contract to deliver the Janadriyah cultural district at Qiddiya entertainment city on the outskirts of Riyadh. The contract was awarded by gigaproject developer Qiddiya Investment Company (QIC).
The scope covers the construction of six structures, including a heritage building, a gateway hotel, a wadi hotel, a creative hub, a community centre and an open-air market.
In June, MEED exclusively reported that QIC had awarded CSCEC a contract to build a new transport hub at Qiddiya entertainment city.
The project is located within the resort core zone of the development.
Kuwait market overview
UK analytics firm GlobalData expects Kuwait’s construction industry to average annual growth of 4.9% in 2026-29, supported by government investment in renewable energy and transport infrastructure.
In September 2025, Kuwait’s government allocated KD1.3bn ($4.2bn) for 141 projects, as part of its capital spending during the fiscal year 2025-26. This allocation was intended for 162 current projects and 17 new projects.
According to government data, as of September 2025, the country had around 300 active projects, valued at about KD35.3bn ($115bn), with large infrastructure projects making up nearly half of that total.
https://image.digitalinsightresearch.in/uploads/NewsArticle/17674440/main.jpg