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Saipem moves to maintain grip on Gulf offshore market

28 March 2025

Commentary
Indrajit Sen
Oil & gas editor

Saipem is by far the largest contractor in the Gulf’s offshore oil and gas industry. The Italian firm won five out of the eight offshore engineering, procurement, construction and installation (EPCI) jobs awarded by Saudi Aramco in 2024 and succeeded in Qatar with both phases of the multibillion-dollar North Field Production Sustainability (NFPS) programme.

Despite its accomplishments, Saipem realises the need to grow its business. In February, the Milanese company started a merger transaction with UK-based Subsea7 to create an offshore services giant that will dominate the Gulf and international projects market in the future.

Saipem’s concerns about its position in the regional market are not unfounded. In late March, India’s Larsen & Toubro (L&T) announced winning the largest contract in its history. The job, estimated to be worth $4bn-$5bn, is also part of the second phase of QatarEnergy LNG’s NFPS programme.

Abu Dhabi’s NMDC Energy, which has grown to become a regional giant in recent years, is also a major challenger to Saipem. The Abu Dhabi-listed firm is deeply entrenched in its home market, and competing with it for Abu Dhabi National Oil Company (Adnoc) offshore projects is no easy task for overseas contractors.

There are others, such as Lamprell and China Offshore Oil Engineering Company (COOEC). Since being acquired by its Saudi owners in 2022, Lamprell has grown its workforce and assets, resulting in key Aramco project wins.

COOEC, too, has been winning offshore work from Aramco, and is now seeking to grab a bigger share of the Saudi market. The Chinese firm recently signed an agreement with Aramco to potentially invest in a fabrication facility in the kingdom – a move that has, and continues to, pay dividends for its peers Saipem, Lamprell and NMDC Energy.

In Saudi Arabia, competition for every Aramco offshore EPCI job is fierce, and past performances count for little. By renewing Long-Term Agreements with some of the contractors earlier this year, Aramco has pushed the reset button and ensured a level playing field for all. 

The backdrop to this intense competition is a GCC offshore oil and gas industry that is going through a prolific era, heralded by a surge in capital expenditure on projects by regional operators since 2023.

With capital expenditure on GCC offshore projects in 2025 set to surpass last year’s record, competition for work is expected to remain vigorous – a situation project operators will be keen to maintain.

ALSO READ: Regional offshore oil and gas sees steady capex

MEED’s April 2025 report on Saudi Arabia includes:

> GOVERNMENT: Riyadh takes the diplomatic initiative
> ECONOMY: Saudi Arabia’s non-oil economy forges onward
> BANKING: Saudi banks work to keep pace with credit expansion
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development

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Indrajit Sen

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    NFPS scheme

    QatarEnergy’s North Field liquefied natural gas (LNG) expansion programme requires the state enterprise to pump large volumes of gas from the North Field offshore reserve to feed the three phases of the estimated $40bn-plus programme.

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    Separately, QatarEnergy LNG awarded McDermott the contract for the NFPS second phase package known as EPCI 1, or COMP1, in July 2023. The scope of work on the estimated $1bn-plus contract is to install a subsea gas pipeline network at the North Field gas development.

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    NFPS first phase

    Saipem is also executing the EPCI works on the entire first phase of the NFPS project, which consists of two main packages.

    Through the first phase of the NFPS scheme, QatarEnergy LNG aims to increase the early gas field production capacity of the North Field offshore development to 110 million tonnes a year.

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    The scope of work also includes decommissioning a pipeline and other significant modifications to existing offshore facilities.

    In addition, in April 2021, QatarEnergy LNG awarded Saipem two options for additional work within the EPCI package, worth about $350m.

    QatarEnergy LNG awarded Saipem the second package of the NFPS phase one project, estimated to be worth $1bn, in March 2021.

    Saipem’s scope of work on the package, which is known as EPCL, mainly covers installing three offshore export trunklines running almost 300km from their respective offshore platforms to the QatarEnergy LNG north and south plants located in Ras Laffan Industrial City.

    Saipem performed the front-end engineering and design work on the main production package of the first phase of the NFPS as part of a $20m contract that it was awarded in January 2019. This provided a competitive advantage to the Italian contractor in its bid to win the package.

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    Indrajit Sen