Recovery in sight

Business announced at Gastech may prove a decisive turning point for regional upstream companies.

After a turbulent start to 2009 for the upstream oil and gas community, a period of calm optimism is finally amongst us again. Oil emphatically broke through the $60 barrier last month, closing at $66.97 at time of press.

Crude stepped up to its highest price since November in May and the confidence that spike has delivered in the Middle East is real, and its tangible effects were felt by all those attending Gastech in Abu Dhabi. The conferences season is winding down for summer across the region, but it went out with quite a bang with Gastech. The optimistic mood was markedly different from all the industry get-togethers since ADIPEC 2008.

The first quarter was set against a backdrop of a free-falling oil and gas market, and the gloomy impact on executives and managers across the sector was stark.

However, at Gastech the world’s most influential upstream companies were well represented, and reinvigorated by opportunities to strike up business in the Middle East and North Africa. Global focus once again shifted to the MENA powerhouses, and business was done at a brisk pace.

Sonatrach, Algeria’s national oil company, told Oil & Gas Middle East that the E&P five-year budget alone stood at $65 billion, and the door was wide open for upstream players to bring their expertise and proposals to the company’s door.

Additionally four tenders were issued to contractors for development of the Shah sour gas field in Abu Dhabi, and ADNOC CEO Yusuf Bin Omeir Bin Yusuf said that Abu Dhabi’s oil and gas companies would push ahead with upstream projects, ensuring the infrastructure was in place for the inevitable upswing in energy prices, and getting the job done for better value to boot.

If you think you missed anything from Gastech, go to ArabianOilandGas.com and take your pick from the comprehensive daily reports and exclusive photo galleries.

With oil, gold and silver rallying in May, a commodities super-cycle could well begin in earnest as the temperatures soar across the region. A decisive push on energy prices could transform the economic landscape for the suppliers, support industries and service providers as the Middle East ramps up its production plans once again. Fingers crossed for a busy summer.

Daniel Canty is the group editor of ITP Business’ energy titles.

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