More than 360 energy projects in pipeline despite region's push for economic diversification
The combined value of the 361 active oil and gas projects in the GCC crossed $331.4 billion in November, according to new research.
The Oil and Gas Construction Analytics report issued by BNC Network said the hydrocarbon sector represents 30 percent of the GCC economy and 60 percent of the total exports value.
It added that the construction projects constitutes 2 percent of all active projects in the region while accounting for 14 percent of the total estimated value.
The construction update comes at a time when the average oil price has recovered to $51.82 per barrel year-to-date in 2017, from the 13-year lowest average price per barrel of $42.55 in 2016, this is less than half of the $111.63 per barrel recorded in 2012.
“In the third quarter of 2017, 17 projects with a combined estimated value of $22.05 billion were announced in the GCC's oil and gas sector, despite a low-oil price environment where oil price has been hovering around the psychological mark of $50 per barrel,” BNC Network's report said.
It added that the number of oil and gas projects in the GCC increased by 6 percent in Q3 compared to the previous quarter while the total estimated value of these projects increased by 5 percent.
Avin Gidwani, CEO of BNC Network, said: “The renewed optimism in the global economy and a slight increase in demand is reflected in the latest Oil and Gas Construction Analytics issued by BNC Network.
“This also reflects that the governments of the Gulf countries are determined to invest more in hydrocarbon projects to increase output and exports of oil and gas products to fuel the global economic growth that is set to accelerate further in the next few years," he added.
A total of 10 oil and gas projects with a combined estimated value of $5.6 billion moved to construction from other stages during the third quarter of 2017, the largest contract awarded being phase 1 of Duqm Refinery and Petrochemical Complex located in Oman worth $2.75 billion.
A total of 15 oil and gas projects with a combined estimated value of $9.9 billion were completed during the third quarter of 2017, the report noted.
Gidwani added: “Although the UAE and other Gulf countries are investing in non-oil energy projects – such as renewable and nuclear power projects – the oil and gas industry is here to stay for a long haul till the alternative fuel consumption, such as battery and solar-powered vehicles, grows worldwide.
“The growth in oil and gas construction projects will also create new jobs and support the region’s economic growth in the next few years.”
BNC tracks 25,324 live construction projects with a value exceeding $7.7 trillion.