Oil and gas industry overall contract value drops by more than 25%

Oil and gas contract value dropped by more than 25% in the third quarter of 2023 according to a GlobalData report.

By GlobalData November 14, 2023
Courtesy: GlobalData

The oil and gas industry’s overall disclosed contract value witnessed a quarter-on-quarter (QoQ) decrease of 26% in Q3 2023, according to GlobalData. Their report, “Oil and Gas Industry Contracts Analytics by Sector, Region, Planned and Awarded Contracts and Top Contractors, Q3 2023 ,” reveals that the overall contract value decreased from $57.4 billion in Q2 2023 to $42.6 billion in Q3 2023. At the same time, the contract volume also saw a drop from 1,425 in Q2 2023 to 1,128 in Q3 2023.

Pritam Kad, oil and gas analyst at GlobalData, said, “The ongoing geopolitical tensions and the unpredictable fluctuations in crude oil prices are significantly dampening the overall sentiment within the oil and gas sector. This is translating into a notable slowdown in projects/contracts activity reflecting a cautious approach among key stakeholders.”

Operation and maintenance (O&M) represented 59% of the total contracts in Q3 2023, followed by procurement scope with 15%, and contracts with multiple scopes, such as construction, design and engineering, installation, O&M, and procurement, which accounted for 13%.

Courtesy: GlobalData

Some of the notable contracts during the quarter include HD Hyundai Heavy Industries’ agreement worth QAR14.2 billion ($3.9 billion) with QatarEnergy for the construction of 17 ultra-modern Liquefied Natural Gas (LNG) carriers, as part of the North Field LNG expansion and Golden Pass LNG export projects as well as long-term fleet replacement requirements in Qatar; and National Petroleum Construction Co (NPCC) and Tecnicas Reunidas consortium’s AED13.1 billion ($3.6 billion) contract from ADNOC Gas for the expansion of gas processing infrastructure at the Habshan complex in Abu Dhabi, United Arab Emirates.

McDermott International’s major contract ranging between $750 million to $1.5 billion from Qatargas Operating Company (Qatargas) for the Engineering, Procurement, Construction, and Installation (EPCI) services for the North Field Production Sustainability (NFPS) COMP1 – offshore fuel gas pipeline and subsea cables project in Qatar, is the other major contract in the quarter.