meed-logo

line1 line2 line3
SIGN IN / REGISTER

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. 

https://image.digitalinsightresearch.in/uploads/NewsArticle/13100083/main.gif
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • Ora Developers adds land bank to its Bayn masterplan

    17 April 2026

    Egyptian firm Ora Developers has signed a land acquisition agreement with Abu Dhabi-based developer Modon Holding to acquire an additional 4.8 million square metres (sq m) of land in the Ghantoot area between Abu Dhabi and Dubai.

    Ora Developers said that the land acquisition will increase the existing Bayn masterplan from 4.8 million sq m to 9.6 million sq m.

    The firm added that the total investment in the masterplan upon completion is expected to reach AED30bn ($8bn).

    In January, Ora Developers appointed six engineering consultancies to lead the development of the first phase of its Bayn residential community project.

    The developer appointed UK-based firm Mace to lead the overall project management.

    Canadian firm WSP will serve as the masterplan, infrastructure, landscape and water bodies design consultant, as reported by MEED in May last year.

    Another US firm, Aecom, will provide construction supervision services.

    Hong Kong’s 10 Design is the project’s architectural concept design consultant.

    Local firm Dewan Architects & Engineers is the project’s design consultant and architect of record.

    The UK’s Currie & Brown is the cost consultant.

    The first phase will offer 805 villas and townhouses, and the project is expected to be completed in 2028.

    The project will also include a neighbourhood park, sports facilities, a water park, a five-star hotel and a shopping mall.

    In December last year, Abu Dhabi government-owned contractor NMDC Group won a AED142m ($39m) contract from Ora Developers.

    The contract scope covers the execution of enabling works on the Bayn masterplan.

    The main construction works on the project's first phase are expected to begin in the second quarter of this year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16439214/main.jpg
    Yasir Iqbal
  • SAR extends deadline for Riyadh section of Saudi Landbridge

    16 April 2026

     

    Saudi Arabia Railways (SAR) has set a deadline of 29 April for a design-and-build contract for the construction of a new railway line, the Riyadh Rail Link, which will run from north to south Riyadh.

    The tender was issued on 29 January. The previous bid submission deadline was 29 March.

    The scope of work includes constructing a 35-kilometre-long double-track railway line connecting SAR’s North-South railway to the Eastern railway network.

    The contract also covers the procurement, construction and installation of associated infrastructure such as viaducts, civil works, utility installations, signalling systems and other related works.

    The project is expected to form a key component of the Saudi Landbridge railway.

    In January, SAR said it will deliver the Saudi Landbridge project through a “new mechanism” by 2034, after failing to reach an agreement with a Chinese consortium for the construction of the project, as MEED reported.

    In an interview with local media, SAR CEO Bashar Bin Khalid Al-Malik said the consortium failed to meet local content requirements and that the project will now be delivered in several phases under a different procurement model.

    The project has been under negotiation between Saudi Arabia and China-backed investors keen to develop it through a public-private partnership.

    Al-Malik said that the project cost is about SR100bn ($26.6bn).

    It comprises more than 1,500 kilometres (km) of new track. The core component is a 900km new railway between Riyadh and Jeddah, which will provide direct freight access to the capital from King Abdullah Port on the Red Sea.

    Other key sections include upgrading the existing Riyadh-Dammam line, a bypass around the capital called the Riyadh Link, and a link between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. Plans to develop it were first announced in 2004, but put on hold in 2010 before being revived a year later. Key stumbling blocks were rights-of-way issues, route alignment and its high cost.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16418597/main.gif
    Yasir Iqbal
  • Public Investment Fund backs Neom

    16 April 2026

    Commentary
    Colin Foreman
    Editor

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Public Investment Fund (PIF) has backed Neom by including it as one of six strategic ecosystems in its newly approved 2026-30 strategy.

    The future of the $500bn gigaproject had been thrown into doubt following the postponement of the 2029 Asian Winter Games at the Trojena mountain resort, the cancellation of construction contracts – such as the $5bn deal with Italian contractor Webuild for dam works at Trojena – and the slowdown of development at The Line, where tunnelling contracts were cancelled and staff left the project.

    The backing comes as Neom’s operational focus appears to be evolving in response to shifting regional dynamics and global economic conditions. For example, on 15 April Neom posted on its official X account about a new Europe-Egypt-Neom-GCC corridor, describing it as a faster route for time-sensitive goods. It said the corridor combines trucking and ferry services to move goods quickly into the Gulf, adding that importers from several European markets are already using it to reach the UAE, Kuwait, Iraq, Oman and beyond.

    Powered by Pan Marine, DFDS and regional RoPax services, the initiative is positioned as a way to add flexibility and resilience to regional supply chains. This emphasis on logistics and immediate trade utility suggests a shift away from the more speculative architectural announcements that characterised Neom’s early years, towards activity more directly tied to current market realities.

    PIF’s broader 2026-30 strategy places heavy emphasis on “delivering competitive domestic ecosystems to connect sectors, unlock the full potential of strategic assets, maximise long-term returns and continue to drive the economic transformation of Saudi Arabia”.

    The inclusion of Neom as a standalone ecosystem within the Vision Portfolio suggests that while the project remains part of the kingdom’s Vision 2030 goals, it will be subject to the fund's focus on working with the private sector.

    That means the long-term success of Neom will increasingly depend on its ability to attract external investment and function as a viable economic hub rather than just a state-funded construction site.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16417262/main.jpeg
    Colin Foreman
  • Kuwait gas project worth $3.3bn put on hold

    16 April 2026

     

    State-owned Kuwait Gulf Oil Company’s (KGOC’s) planned tender for the development of an onshore gas plant next to the Al-Zour refinery has been put on hold due to uncertainty created by the US and Israel’s war with Iran, according to industry sources.

    The project budget is estimated to be $3.3bn, and the last meeting with contractors to discuss the project took place in Kuwait on 10 February.

    Previously, it was expected to be tendered in late March, but the tendering process was delayed due to the regional conflict and disruption to shipping through the Strait of Hormuz.

    One source said: “This tender is now effectively on hold while KGOC waits for increased stability in the region before it invites companies to bid for the contract.”

    Under current plans, the plant will have the capacity to process up to 632 million cubic feet a day of gas and 88.9 million barrels a day of condensates from the Dorra offshore field, located in Gulf waters in the Saudi-Kuwait Neutral Zone.

    Ownership of the field is disputed by Iran, which refers to the field as Arash.

    Iran claims the field partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development.

    It is believed that the Dorra field’s close proximity to Iran will make development difficult due to the current security environment.

    The offshore elements of the project are expected to be especially difficult to protect from attacks from Iran.

    In July last year, MEED reported that KGOC had initiated the project by launching an early engagement process with contractors for the main engineering, procurement and construction tender.

    France-based Technip Energies completed the contract for the front-end engineering and design.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413221/main.png
    Wil Crisp
  • Iraq pushes to revive oil pipeline through Saudi Arabia

    16 April 2026

    Iraq is pushing to revive an oil pipeline that passes through Saudi Arabia, allowing it to diversify export routes.

    Saheb Bazoun, a spokesman for Iraq’s Oil Ministry, said the pipeline would help to insulate Iraq from any future blockades of the Strait of Hormuz, which has been largely closed since 28 February.

    The original pipeline through Saudi Arabia has not been used for more than 30 years and would need work to be done in order to bring it online.

    It is 1,568km long, extending from the city of Zubair in Iraq to the Saudi port of Yanbu on the Red Sea.

    The pipeline was built in two phases during the 1980s. The first phase stretches between Zubair and Khurais, while the second extends to Yanbu. The pipeline’s operating capacity reached over 1.6 million barrels a day (b/d).

    Following the Gulf War, the pipeline was shut down in August 1990. It has remained out of operation for decades, despite Iraq’s several attempts to restart it.

    The original pipeline project cost over $2.6bn, including storage tanks and loading terminals.

    In the wake of the US and Israel attacking Iran on 28 February, global markets have lost 11 million barrels a day (b/d) of oil supply due to the effective closure of the Strait of Hormuz.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413290/main.jpg
    Wil Crisp