meed-logo

line1 line2 line3
SIGN IN / REGISTER

Saudi oil and gas spending to surpass 2024 level

26 March 2025

 

When Saudi Arabia’s Energy Ministry directed Saudi Aramco in January 2024 to abandon its campaign to expand oil production spare capacity from 12 million barrels a day (b/d) to 13 million b/d by 2027, there were concerns that it would lead to a slow year for oil and gas project spending.

Indeed, as a consequence of that government decision, Aramco cancelled the tendering process for at least 15 contracts involving the engineering, procurement, construction and installation (EPCI) of structures at offshore oil and gas fields.

Since then, however, the Saudi energy giant has gone the other way. In its financial results for 2024, Aramco reported that it increased its capital investment last year to $53.3bn, which includes $50.4bn of organic capital expenditure (capex), marking a rise of 27% compared to 2023.

Offshore spending

The capex figure for 2024 includes an estimated $5bn that Aramco spent on EPCI contracts for maintenance, modification and upgrade of infrastructure at its offshore oil and gas fields.

Italian contractor Saipem was the biggest beneficiary of Aramco’s offshore spending, winning five of the eight Contracts Release and Purchase Orders (CRPOs) awarded last year.

In early May 2024, Aramco awarded Saipem the contract for 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 Milan-listed contractor then scooped three 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.

Aramco also awarded the Italian contractor CRPO 127 in September. The $2bn contract involves the 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.

In late November, Aramco awarded three further CRPOs, worth more than $500m. China Offshore Oil Engineering Company won CRPOs 149 and 152, which are estimated to be valued at $30m and $250m-$300m, respectively. UK-based Subsea7 secured CRPO 153, which is understood to be valued at $200m-$250m.

Upstream increase

Saudi Aramco is expected to increase spending even further in 2025, based on its capital investment guidance in the range of $52bn-$58bn for 2025, excluding about $4bn of project financing.

It is anticipated that the majority of this capex budget will be allocated to upstream schemes, as Aramco is still responsible for maintaining Saudi Arabia’s spare oil production capacity at 12 million b/d. With Riyadh set to raise its oil production from April as part of a wider Opec+ plan, Aramco will be required to tap into its spare output capacity.

In its financial statement for 2024, Aramco said its spare capacity of 12 million b/d “provides flexibility to help meet potential oil demand growth”, adding that if necessary, using 1 million b/d of existing spare capacity could “generate an additional $12bn in operating cash flow, based on 2024’s average price” of $80.2 a barrel.

In addition, Amin Nasser, Aramco’s president and CEO, was quoted in the financial statement as saying that “global oil demand reached new highs in 2024, and we expect further growth in 2025”.

“With dependable and more sustainable energy key to global economic growth, we continue to make progress on projects to maintain our maximum sustainable crude oil capacity, expand our gas capabilities, achieve further integration of our upstream and downstream businesses to capture additional value, and help mitigate greenhouse gas emissions,” Nasser said.

Saudi Arabia’s offshore fields contain most of the kingdom’s hydrocarbons reserves and it has therefore been forecast that offshore EPCI projects will dominate Aramco’s upstream spending in 2025.

Aramco is in the bid evaluation and tendering stages for a total of 12 additional offshore tenders, including four CRPOs – numbers 145, 146, 147 and 148 – for work on the expansion of the Zuluf field development.

In December, contractors in Aramco’s Long-Term Agreement (LTA) pool of offshore service providers submitted bids for the four tenders, which are estimated to be worth a total of $6bn. The contract awards are due in the second quarter of this year.

LTA contractors also submitted bids in December for CRPO 150, a $350m-$400m tender involving the installation of structures at Aramco’s Northern Area Oil Operations.

Also in December, Aramco issued seven further CRPOs to its LTA pool of contractors. Bids for CRPOs 157, 158, 159 and 160 – relating to the EPCI of several structures at the Abu Safah, Berri, Manifa and Zuluf fields – are due to be submitted by 13 April.

CRPOs 154, 155 and 156 cover the next expansion phase of the Safaniya field. Offshore LTA contractors are due to submit bids for these three tenders by 31 July.

Gas focus

In line with its aim of increasing gas production by 60% by 2030, with 2021 as its baseline, Aramco is on course to further advance its Jafurah unconventional gas production programme. Located in Saudi Arabia’s Eastern Province, the Jafurah basin holds the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. This shale play covers an area of 17,000 square kilometres.

The Jafurah project is a key component of Aramco’s long-term gas production strategy. The company expects the overall lifecycle investment at Jafurah to exceed $100bn.

In February 2020, Aramco received a capex grant of $110bn from the Saudi government for the long-term phased development of the Jafurah unconventional gas resource base.

Aramco is estimated to have spent a total of $25bn on three development phases of the Jafurah unconventional gas reserve. Most recently, in July 2024, a consortium of Spanish contractor Tecnicas Reunidas and China’s Sinopec Group was awarded a $2.24bn contract to perform engineering, procurement and construction (EPC) works on the third expansion phase.

The fourth Jafurah expansion phase is estimated to be valued at about $2.5bn. The main scope of work involves the EPC of three gas compression plants, each with a capacity of 200 million cubic feet a day (cf/d).

Bids for the fourth phase of Jafurah were submitted in mid-January and are being evaluated by Aramco, with the contract award due in the second quarter of 2025.

Looking ahead, Aramco is preparing to start the tendering process for the fifth Jafurah expansion phase later this year. The project, which is in the front-end engineering and design stage, is expected to add another 200 million cf/d of output capacity at the Jafurah master development.

MEED’s April 2025 report on Saudi Arabia also includes:

> 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
> BANKING: Saudi banks work to keep pace with credit expansion

https://image.digitalinsightresearch.in/uploads/NewsArticle/13477690/main.jpg
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • Bahrain’s economy walks precarious path

    26 November 2025

    Download the PDF

    MEED’s December 2025 report on Bahrain includes:

    > COMMENT: Manama pursues reform amid strain
    > GVT & ECONOMY: Bahrain’s cautious economic evolution
    > BANKING: Mergers loom over Bahrain’s banking system
    > OIL & GAS: Bahrain remains in pursuit of hydrocarbon resources
    > POWER & WATER: Bahrain advances utility reform
    > CONSTRUCTION: Bahrain construction faces major slowdown
    > TRANSPORT: Air Asia aviation deal boosts connectivity

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15159666/main.gif
    MEED Editorial
  • Rua Al-Madinah signs hotel operations agreement

    26 November 2025

    Saudi Arabia’s Rua Al-Madinah, the Public Investment Fund (PIF) subsidiary tasked with Medina’s tourism and cultural development, has signed a hotel operations and management agreement with Adeera Hospitality for its Rua Al-Madinah project.

    Adeera Hospitality, which PIF also backs, will operate two buildings comprising 250 hotel rooms and 120 residential units under its Alia brand within the Rua Al-Madinah project, which is being developed near the Prophet’s Mosque.

    Adeera joins Rua Al-Madinah’s roster of hotel operators, which includes leading global hospitality brands such as Marriott, Hyatt, Accor and Hilton.

    The Rua Al-Madinah development includes the construction of 18 hotels under three categories – three-star, four-star and five-star – as well as secondary infrastructure.

    The towers will range in height from 11 to 21 storeys.

    Rua Al-Madinah estimates that superblock five will require 430,000 cubic metres of concrete, 875,000 square metres of block wall, 423,000 sq m of drywall, 74,000 tonnes of steel rebar, 215,000 sq m of tiles, and 228,000 sq m of facades, curtain walls and windows.

    The hotels, which will mainly provide accommodation for pilgrims visiting the holy city, will have a built-up area of about 65,000 sq m.

    In February last year, the client awarded two contracts worth SR300m ($80m) to international consulting firms for work on the superblocks four and five components of the Rua Al-Madinah project.

    Rua Al-Madinah signed a contract with US-based engineering firm Jacobs for design consultancy services for 12 hotels and other infrastructure for superblock four of the project.

    Another contract was signed with US-based KEO International Consultants to oversee the implementation of the superblock five project.

    Other consultants working on superblock five include US-based Perkins Eastman and Singapore-based Meinhardt. 

    UAE-based Ema Design is the interior designer.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15158923/main.jpg
    Yasir Iqbal
  • Meraas confirms $517m The Acres villas contract award

    26 November 2025

    Dubai-based real estate developer Meraas, now part of Dubai Holding Group, has confirmed that it has awarded a AED1.9bn ($517m) contract to build 642 three-, four- and five-bedroom villas as part of the first phase of its residential community, The Acres, in Dubailand.

    The contract was awarded to the local firm United Engineering Construction Company.

    MEED exclusively reported in August that Meraas had awarded the contract for the project.

    The Acres project is designed by local architectural practice U+A Architects.

    The masterplan includes 1,200 villas ranging from three to seven bedrooms.

    It also features a nursery, school, clinic, mosques, clubhouses, a retail zone, a 2,000-square-metre garden, walking and biking trails, an outdoor gym, children’s playgrounds, swimming pools and sports facilities.

    The latest announcement follows Meraas awarding a AED440m ($120m) contract for the construction of the Northline residential project in the Al-Wasl area of Dubai.

    The contract was awarded to the local GCC Contracting Company.

    The project includes the construction of three residential buildings. Construction work is expected to begin shortly, and the project is slated for completion by 2027.

    Meraas’ latest project contract awards in Dubai are backed by heightened real estate activity in the UAE’s construction market. Schemes worth over $323bn are in the execution or planning stages, according to UK analytics firm GlobalData.

    The company forecasts that the output of the UAE’s construction sector will grow by 4.2% in real terms in 2025, supported by developments in infrastructure, energy and utilities, as well as residential construction projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15158561/main.jpg
    Yasir Iqbal
  • December deadline for Riyadh airport fourth runway

    26 November 2025

     

    King Salman International Airport Development Company (KSIADC) has allowed firms until 3 December to bid for the design-and-build contract for the fourth runway at King Salman International airport (KSIA) in Riyadh.

    The tender was first floated on 17 April. The previous bid submission deadline was 28 October.

    It is understood that the third and fourth runways will add to the two existing runways at Riyadh’s King Khalid International airport, which will eventually become part of KSIA.

    KSIADC, which is backed by Saudi Arabia’s Public Investment Fund, prequalified firms in September last year for the main engineering, procurement and construction packages; early and enabling works; specialist systems and integration; specialist systems, materials and equipment; engineering and design; professional services; health, safety, security, environment and wellbeing services; modular installation and prefabrication; local content; and environmental, social, governance and other services.

    The entire scheme is divided into eight assets. These are:

    • Iconic Terminal
    • Terminal 6
    • Private aviation terminal 
    • Central runway and temporary apron
    • Hangars
    • Landside transport
    • Cargo buildings
    • Real estate

    In August last year, KSIADC confirmed it had signed up several architectural and design firms for the various elements of the project.

    US-based firm Bechtel Corporation will manage the delivery of three new terminals, including the terminal for commercial carriers, Terminal 6 for low-cost carriers and a new private aviation terminal with hangars.

    Parsons, also of the US, was chosen as the delivery partner for two packages. One covers the airside infrastructure, including the runways, taxiways, air traffic control towers, fuel farms and fire stations. The other involves the infrastructure connecting the airport to the rest of the city, including utilities and roads.

    UK-based Foster+Partners will design the airport’s masterplan, including the terminals, six runways and a multi-asset real estate area.

    US-based engineering firm Jacobs will provide specialist consultancy services for the masterplan and the design of the new runways.

    UK-based engineering firm Mace was appointed as the project’s delivery partner and local firm Nera was awarded the airspace design consultancy contract.

    Project scale

    The project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways, and will include the existing terminals at King Khalid International airport. It will also include 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.

    If the project is completed on time in 2030, it will become the world’s largest operating airport in terms of passenger capacity, according to UK analytics firm GlobalData.

    The airport aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. The goal for cargo is to process 3.5 million tonnes a year by 2050.

    Saudi Arabia plans to invest $100bn in its aviation sector. Riyadh’s Saudi Aviation Strategy, announced by the General Authority of Civil Aviation (Gaca), aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.

    It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15158546/main.jpg
    Yasir Iqbal
  • Chinese contractor appointed for Algerian refinery project

    26 November 2025

    China’s Sinopec Guangzhou Engineering Company has signed a contract for the construction of a heavy naphtha catalytic processing unit at the Arzew refinery in Algeria.

    The contract was signed with the Algerian national oil and gas company Sonatrach.

    The contract uses the engineering, procurement, construction and operation model.

    Under the terms of the contract, Sinopec Guangzhou Engineering Company will handle the entire project lifecycle, from initial design to long-term management and operation.

    The project will be completed over 30 months, according to a statement from the Algerian Ministry of Hydrocarbons & Mines.

    The unit will have an annual capacity of 738,000 tonnes of heavy naphtha and will enable the refinery to increase gasoline production from 550,000 tonnes to 1.2 million tonnes a year.

    Algeria’s Ministry of Hydrocarbons & Mines said this represented “a significant step” that will strengthen the national capacity for gasoline production and help meet demand across various regions, particularly in the west and southwest of the country.

    Sinopec Guangzhou Engineering Company is a subsidiary of China Petroleum & Chemical Corporation (Sinopec), which is listed on stock exchanges in Hong Kong, Shanghai and New York.

    The project is part of Sonatrach’s wider programme to modernise and expand national refining capacities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15157814/main.jpg
    Wil Crisp