Upstream sector sees record year
28 December 2023
The upstream oil and gas industry in the Middle East and North Africa (Mena) region may never again witness the level of project spending recorded in 2023.
Over $82bn-worth of engineering, procurement and construction (EPC) contracts were awarded in the region in 2023, with oil and gas production capacity growth projects accounting for 60 per cent of that capex.
Abu Dhabi National Oil Company (Adnoc) led capex on Mena oil and gas EPC projects in 2023, mainly owing to its $17bn Hail and Ghasha offshore sour gas development project.
Saudi Aramco was the second-largest spender on the back of its estimated $10bn EPC contracts for the second expansion phase of its Jafurah unconventional gas development.
Aramco also maintained a robust level of spending on offshore oil and gas field upgrade works, having awarded some $5.3bn of engineering, procurement, construction and installation contracts to its Long-Term Agreement pool of contractors.
In June, QatarEnergy awarded a $10bn EPC contract for two liquefied natural gas (LNG) trains, which form the main package of the North Field South project – the second phase of its North Field LNG expansion programme.
Environmental commitments, stringent emissions reduction targets on the part of governments and state energy enterprises and a sluggish outlook for oil demand will make it hard for the Mena upstream sector to match 2023’s upstream project expenditure again.
However, in its latest annual outlook, Opec expects world oil demand to reach 116 million barrels a day (b/d) by 2045. This is about 6 million b/d higher than predicted in last year’s report, with growth led by China, India, other Asian nations, Africa and the Middle East. About $14tn of investment until 2045 is needed to meet this demand, Opec stated.
With most regional states members of the Opec+ alliance, they are expected to heed the organisation’s call for continued investments in upstream capacity building, leading to a period of stable and steady spending in 2024.
Iraqi gas programme
The entry of French energy giant Total Energies in Iraq in July as a partner in the $27bn Gas Growth Integrated Project (GGIP) significantly boosted the country’s energy sector. The agreement to kickstart work on GGIP was long overdue, and involves TotalEnergies developing four energy projects with an initial investment of $10bn in southern Iraq.
A sticking point was Iraq’s demand for a 40 per cent share of the project. This was ultimately resolved when the Iraqi government accepted a 30 per cent share. TotalEnergies is the consortium leader with a 45 per cent stake and QatarEnergy holds 25 per cent.
Progress on GGIP projects remains slow and marred by political and financial instability in Iraq, among other issues. However, the presence of major players such as TotalEnergies and QatarEnergy as stakeholders provides the guarantees and support required for the programme to gain traction in 2024.
Upper Zakum
Adnoc Offshore, meanwhile, is nearing a decision on the EPC contract award for an estimated $7bn project to increase the production potential of Abu Dhabi’s largest producing oil asset – the Upper Zakum offshore field – to 1.2 million b/d.
The main scope involves the EPC of surface facilities and plants at the Upper Zakum offshore development’s four main artificial islands of Al-Ghallan, Umm al-Anbar, Ettouk and Asseifiya.
Located 84 kilometres offshore in Abu Dhabi, Upper Zakum is the world’s second-largest offshore field and fourth-largest oil field. Adnoc Offshore initiated the UZ1000 project in 2019, aiming to raise Upper Zakum’s oil production capacity to 1 million b/d by 2024. The goal was then increased to 1.2 million b/d, with the completion timeline likely to have been extended.
North Field
QatarEnergy LNG is awaiting bids from contractors for an estimated $4bn EPC package for the second phase of its North Field Production Sustainability (NFPS) project, which involves building two large gas compression complexes.
The package is the fourth EPC tender to be issued by QatarEnergy LNG as part of NFPS phase two. The second phase involves building gas compression facilities to sustain and gradually increase gas production from Qatar’s offshore North Field gas reserve over the long term.
The strategic objective of the two phases of the NFPS project is to support QatarEnergy’s North Field LNG expansion programme.
Saudi chemical ambitions define Mena downstream sector
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Contractors submit prices for Upper Zakum expansion project
16 March 2026
Contractors have submitted commercial proposals for the next expansion phase of the Upper Zakum offshore field development in Abu Dhabi, aimed at increasing the asset’s oil production potential to 1.5 million barrels a day (b/d).
The offshore oil and gas production business of Abu Dhabi National Oil Company (Adnoc Offshore) has divided the UZ 1.5MMBD project’s engineering, procurement and construction (EPC) scope of work into three packages, MEED previously reported.
Contractors submitted commercial bids for package 1 by the 23 February deadline and for packages 2 and 3 by the 27 February deadline, according to sources. The previous deadline for submission of commercial bids was 15 January.
Adnoc Offshore is understood to have issued the main tender for EPC works for the UZ 1.5MMBD project in the third quarter of last year.
Contractors submitted technical bids for package 1 by 21 November, while proposals for packages 2 and 3 were submitted by 14 November, MEED previously reported.
In November 2024, MEED reported that Adnoc Offshore had awarded a contract for front-end engineering and design (feed) and pre-feed services on the project to France-headquartered contractor Technip Energies.
A kick-off meeting between Adnoc Offshore and Technip Energies took place on 21 November 2024.
Located 84 kilometres offshore in Abu Dhabi, Upper Zakum is the world’s second-largest offshore oil field and fourth-largest oil field.
The UZ 1.5MMBD project is the latest crude output expansion undertaken by Adnoc Offshore at the Upper Zakum field development.
Upper Zakum expansion
The first phase of the programme to raise the Upper Zakum offshore field development’s oil production capacity to 1.2 million b/d was launched in 2019. The initial goal was to increase the field’s output potential to 1 million b/d by 2024, which was later increased to 1.2 million b/d, with the project execution timeline eventually extended.
In April last year, MEED reported that Adnoc Offshore had awarded the main EPC contract for the UZ 1.2MMBD EPC-1 project to UAE-based Target Engineering Construction Company. The value of the contract was estimated to be $825m.
The project’s main scope involved the EPC of several surface facilities and plants at the Upper Zakum offshore development’s four main artificial islands: Al-Ghallan, Umm Al-Anbar, Ettouk and Asseifiya – also known as Central Island, West Island, North Island and South Island, respectively.
Spanish contractor Tecnicas Reunidas won the contract for the feed works on the UZ 1.2MMBD EPC-1 project in 2019. UK-headquartered Wood Group was appointed as the project management consultant for the EPC phase.
In November 2024, MEED reported that Adnoc Offshore had also selected Target for the second phase of the Upper Zakum 1.2 million b/d project (UZ 1.2MMBD EPC-2). The value of the contract was estimated to be about $500m, according to sources.
Target began work on the project in December last year, MEED previously reported.
The scope of work on the UZ 1.2MMBD EPC-2 project covers the EPC of several structures on Assefiya Island.
Adnoc Offshore performed the feed work on the UZ 1.2MMBD EPC-2 project in-house.
Upper Zakum oil production
Adnoc Offshore has committed to a total capital expenditure budget of approximately $30bn, along with its operating partners in the Upper Zakum hydrocarbons concession, Japan Oil Development Company (Jodco) and US-based ExxonMobil.
The strategic objective is to first raise the asset’s oil output from 640,000 b/d to 750,000 b/d through the UZ 750 project, then to 1.2 million b/d through the two phases of the ongoing UZ 1.2MMBD project, and eventually to 1.5 million b/d.
Zakum Development Company (Zadco), which later merged into Adnoc Offshore, awarded EPC contracts for the UZ 750 project in 2012 and early 2013.
The $817m first package was awarded to a consortium of Abu Dhabi’s NMDC Energy (then known as National Petroleum Construction Company) and Technip Energies. Package two, the project’s largest EPC package, worth $3.7bn, was awarded to a consortium of UK-headquartered Petrofac and South Korea’s Daewoo Shipbuilding & Engineering.
EPC work on UZ 750 began in 2014 and was completed in 2022.
In October 2022, Adnoc Group subsidiary Adnoc Drilling set a world record for drilling the longest oil and gas well at the Upper Zakum concession, stretching 50,000 feet.
The extended-reach wells will tap into an undeveloped part of the Upper Zakum reservoir, potentially increasing the field’s production capacity by 15,000 b/d without expanding or building any new infrastructure, Adnoc said.
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Neom cancels The Line tunnels contracts
16 March 2026
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Neom has cancelled the contracts related to the construction of the tunnel sections of The Line in northwest Saudi Arabia.
In a stock exchange announcement filed on 13 March, South Korean contractor Hyundai E&C said that Neom cancelled its contract on 29 December last year.
Hyundai E&C was executing the drill-and-blast section of The Line’s tunnels in a joint venture with Greece’s Archirodon and South Korean counterpart Samsung C&T.
The firm said its share of the joint venture was about 35%, amounting to $483m.
Neom awarded contracts for constructing the mountain tunnel sections of The Line in June 2022.
The drill-and-blast works were split into four packages, with two contracting teams winning two packages each.
The other joint-venture team comprised Spain’s FCC, the local Shibh Al-Jazira Contracting Company (Sajco) and Beijing-based China State Construction Engineering Corporation.
The tunnels formed part of the infrastructure backbone of Neom’s 170-kilometre The Line development, launched in January 2021.
What began as Crown Prince Mohammed Bin Salman’s defining symbol of a post-oil Saudi Arabia unravelled with quiet finality over roughly two years. By April 2024, planners were reportedly being forced to cut the initial phase to just 2.4km by 2030.
By July last year, with the sovereign wealth fund facing tightening liquidity, the kingdom was reported to have conducted a “strategic review” to determine whether The Line was feasible – a process described as a “recalibration” of Vision 2030.
Resources are now being directed to projects essential for the Fifa World Cup 2034, Expo 2030, and critical housing, healthcare and education targets.
According to media reports, the government has pivoted towards repositioning what remains of Neom as an industrial and data centre hub, leveraging the Red Sea coastline’s access to seawater cooling for artificial intelligence (AI) infrastructure.
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Bidders get more time for Riyadh East sewage treatment plant
16 March 2026
State water offtaker Sharakat, formerly Saudi Water Partnership Company (SWPC), has extended the bid submission deadline for the Riyadh East independent sewage treatment plant (ISTP).
The new deadline is 30 June. The original deadline was 2 April.
The project will be developed under a build‑own‑operate‑transfer (BOOT) model with a 25‑year concession term.
The plant will have a treatment capacity of 200,000 cubic metres a day (cm/d) in its first phase, expanding to 500,000 cm/d in the second phase.
It includes the development of a treated sewage effluent transmission pipeline, forming part of the kingdom’s wider programme to expand wastewater treatment capacity through public-private partnerships.
The request for proposals (RFP) was issued last October.
In 2024, Sharakat prequalified 53 companies that could bid for the Riyadh East ISTP, part of seven planned ISTP projects it said it would procure between 2024 and 2026
WSP is the technical adviser and KPMG Middle East is the lead and financial adviser on the project.
The targeted commercial operation date for the facility is 2029.
ISTP plans
Sharakat’s current ISTP portfolio includes 10 large plants that are operational, under construction or under tendering, with a combined initial treatment capacity of 1.79 million cm/d.
These projects include North Taif, Jeddah Airport, West Dammam, Madinah 3, Buraydah 2, Tabuk 2, Al-Haer, Arana, Hadda and Riyadh East.
In December, two consortiums were selected for contracts to develop and operate the Hadda and Arana ISTP projects in Mecca province.
That same month, Sharakat prequalified 63 developers for upcoming ISTP projects under a revised prequalification process.
According to Sharakat’s newly released seven-year statement, it has identified six additional large ISTPs in the development pipeline.
These include:
- Kharj (75,000 cm/d)
- Abu Arish (50,000)
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- Riyadh North (TBD)
- Najran South (50,000)
- Khamis Mushait (50,000)
The company is also pursuing a nationwide small sewage treatment plant programme covering about 139 smaller ISTPs grouped into seven clusters.
These are designed to add roughly 521,450 cm/d of additional treatment capacity across the kingdom.
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Modon launches Tara Park on Abu Dhabi’s Reem Island
16 March 2026
Abu Dhabi-based Modon Holding has launched the Tara Park residential project in the Reem Island area.
The project comprises two residential towers with a total of 340 residential units.
The development includes a 527-metre jogging track.
The latest project launch follows Modon Holding’s launch of the Bashayer residential waterfront community on Hudayriyat Island.
The project will comprise 157 four- and five-bedroom villas centred around a clubhouse with a rooftop infinity pool, and 330 one- to four-bedroom apartments across two low-rise buildings.
The development comprises a 3.5-kilometre waterfront promenade and a park.
In October last year, Modon Holding launched the Maysan residential development on Abu Dhabi’s Reem Island.
This development covers an area of about 600,000 square metres.
Maysan is being developed in several phases. The project’s first phase involves developing two districts: Mayar and Thoraya.
The first district, Mayar, consists of 132 mansions. The four-storey mansions will be located within a gated community featuring a central park and walking trails.
The second district, Thoraya, features 184 townhouses. It will include gardens, play areas, a gym and other associated facilities.
READ THE MARCH 2026 MEED BUSINESS REVIEW – click here to view PDFRiyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.
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Jordan begins prequalification for Amman water project
16 March 2026
Jordan’s Ministry of Investment has issued a request for qualifications (RFQ) for a non-revenue water (NRW) reduction project in the southern and southeastern areas of Amman.
The project will be delivered under a public-private partnership (PPP) model using a design, build, finance, operate and maintain structure. It aims to reduce water losses and improve the efficiency of water distribution networks in the targeted areas.
The initiative is being led by the Ministry of Investment through its PPP unit in collaboration with the Ministry of Water & Irrigation, the Water Authority of Jordan and Miyahuna.
The procurement is expected to attract international water operators, engineering contractors and infrastructure investors with experience in NRW reduction programmes.
The bid submission deadline is 23 April.
Jordan has prioritised reducing NRW as part of efforts to improve the efficiency of its water sector. The country is among the most water-scarce in the world, and losses from distribution networks are estimated to account for about 45% of water supplied.
NRW reduction programmes typically involve measures such as network rehabilitation, leak detection, pressure management and improved metering to reduce physical and commercial losses across water systems.
Jordan is also advancing its $6bn Aqaba-Amman water desalination and conveyance project that aims to meet about 40% of Jordan’s municipal water demand by 2040.
As MEED recently reported, the project is nearing financial close. Once complete, it will supply about 300 million cubic metres of potable water a year from the Red Sea to Amman and other regions.
In February, the Water Authority of Jordan signed a four-year performance-based management contract with France’s Veolia to support water and wastewater services in the country’s northern governorates.
Under the contract, Veolia will provide operations, maintenance and management services to Yarmouk Water Company, the public utility responsible for water supply and wastewater services in the region.
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