The value of global oil and gas contracts is falling despite stable volume in Q3 2024, GlobalData reveals.
Global oil and gas contract activity saw a 35% quarter-over-quarter decline in total disclosed value, from $55.3 billion in Q2 2024 to $35.7 billion in Q3 2024. Despite this, stable contract volumes, particularly in the Middle East, were boosted by substantial projects such as Saipem's $4 billion contract with QatarEnergy and multibillion-dollar deals from Saudi Aramco, which brought some stability, reveals GlobalData, a leading data and analytics company.
GlobalData's latest report, “Oil and Gas Industry Contract Review by Sector, Region, Terrain, Top Contractors and Issuers, Q3 2024,” reveals that overall contract volume remained relatively stable, with 1,519 contracts in Q3 2024 compared to 1,546 in Q2 2024.
Pritam Kad, oil and gas analyst at GlobalData, comments: “Contracting activity in the Middle East provided little stability, which helped offset the overall decline in value. The move was driven by Saipem's $4 billion contract with QatarEnergy LNG for the North Field offshore compression program in Qatar and major contracts worth over $3 billion signed by Saudi Aramco for engineering, procurement, construction and installation (EPCI) works on the Zuluf, Safaniyah and Marjan field development projects in Saudi Arabia.”
Operation and maintenance (O&M) accounted for 45% of total contracts in Q3 2024, followed by scope of procurement with 33% and multi-scope contracts, such as construction, design and engineering, installation, operation and maintenance and procurement, which accounted for 10%. Notable contracts awarded in Q3 2024 include Bechtel Energy's approximately $4.3 billion lump sum turnkey EPC contract for Train 4 and related infrastructure under the Natural Gas Export Project liquefied gas (LNG) from the Rio Grande in the port of Brownsville, Texas.
Saipem has made significant contributions with several key contracts such as the $4 billion deal with QatarEnergy LNG for the North Field offshore compression program in Qatar, covering the engineering, procurement, manufacturing and installation of six platforms, as well as 28-inch corrosion-resistant alloy rigid subsea pipelines, approximately 100 km of 24-inch subsea composite cables, 100 km, 150 km of fiber optic cables, and various other underwater installations as part of the COMP3A and COMP3B projects. Additionally, Saipem secured a $2 billion contract from Saudi Aramco for EPCI of wellhead platform topsides, jackets, tie-in platforms, rigid flowlines, cables subsea composites and fiber optic cables for the Marjan field in Saudi Arabia, and further received two contracts worth a total of approximately $1 billion for the EPCI of jackets, modules of production bridge, subsea pipelines (rigid and flexible), and subsea electrical cables for the Marjan, Zuluf and Safaniyah fields in Saudi Arabia.
The increase in large-scale offshore and subsea projects, particularly in the Middle East, highlights the continued focus on expanding energy infrastructure to meet growing demand. As companies secure high-value contracts in key oilfields, the sector is not only strengthening its strategic partnerships, but also positioning itself to support the long-term growth of energy production, increasingly placing emphasis on “emphasis on sustainability and technological innovation in project execution.”
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