The reality that the global energy market is in a constant state of change has not been lost on the world. With the international energy transition towards the renewable energy market in full swing, some nations have identified the role that the gas and oil sectors will play in the short term. The Middle East has long been the cornerstone of the traditional oil and gas sector globally, and has recently revealed that a project pipeline has reached an astonishing $55 billion in upcoming contracts.
The Middle East is opening a new round of bidding for the upstream sector
The Middle East has gained astonishing wealth over the years due to the region’s vast amounts of oil and gas, positioning the region as the go-to destination for any upstream sector investors.
Now, a major energy contractor has revealed a project pipeline running into the billions as the region aims to increase investments in the upstream sector, with specific focus placed on:
- Significant upgrades to upstream infrastructure
- More offshore fabrication and installation
- Improving gas-handling and processing projects around the Middle East
- Developing energy-associated infrastructure in Saudi Arabia and the UAE
The energy contractor noted that these new possibilities exemplify the global appetite for growing the upstream sector beyond previous expectations. This new approach aims to foster investments in the region, which is a far cry from the global calls to diversify the international energy market in the coming years.
For any firm hoping to capitalize on the upstream energy growth in the Middle East, the $55 billion opportunity can not be missed, especially due to the ever-changing sentiment towards the conventional energy market.
Several Middle Eastern nations are fostering development in the upstream sector
The evidence would suggest that the nations in the Middle East are not yet prepared to let go of their dominance in the upstream energy market. With the end of Russian energy resources due to the ongoing conflict in Ukraine, the world is turning its attention to regions that could fill the gap left by Moscow.
Industry analysts have noted that for international engineering, procurement, and construction firms, the project pipeline presents several key factors that need to be considered by operators, including but not limited to:
- Size does indeed make a difference – For any company aiming to enter the Middle East upstream sector, ensuring scalability will be key to a successful project.
- Fabrication capacity will play a major role – Fabricating the required energy infrastructure will be essential, as any firm with domestic component manufacturing will benefit from the project pipeline in the Middle East.
Even regions that have no connection to the Middle East are reporting major investments in the upstream sector, such as the African nation of Libya, which recently noted a major onshore oil find that could reshape regional energy projects for years to come.
Ensuring a competitive bidding environment will be key to the project pipeline attracting several new oil and gas projects from the litany of energy companies in the region.
Several nations around the world are planning an expansion of their upstream sectors
The project pipeline in the Middle East is seen as a step towards increasing energy capacity, despite the overwhelming calls to phase out oil and gas production in the coming years. Norway, for instance, has recently revealed that it is preparing to bring online several new upstream projects, exemplifying the role that the conventional oil and gas sector will play in the medium to short term as the world aims to advance generation capacity. Climate change is a battle that every nation will need to deal with, but reducing upstream operations simply is not possible, at least not at the moment.
