Projects market is driven by gas infrastructure and refineries as contractors bag $15.3bn in first quarter
Spending on oil, gas and petrochemicals projects in the Middle East and North Africa (Mena) have risen year-on-year for the third consecutive quarter despite the ongoing uncertainty over crude prices.
Companies in the Mena region excluding Iran and Turkey awarded $15.3bn worth of engineering, procurement and construction (EPC) deals on hydrocarbons in the first quarter of 2016, almost double the same period of 2015.
Mena hydrocarbons spending
Spending over the last three quarters has been driven largely by natural gas infrastructure and oil refining projects as many governments in the region shift priorities away from upstream oil projects.
Major contract awards in the first quarter of 2016 include the $2.93bn deal awarded to South Koreas Hyundai Engineering and Hyundai Engineering & Construction to build a liquefied natural gas (LNG) terminal in Kuwait.
Elsewhere, Italian oil major Eni awarded the contracts to execute the Zohr gas field development off the coast of Egypt to companies including Egyptian groups Petrojet and Enppi, and Italys Saipem.
Spending in each of the last three quarters has been well above average, which has been about $11.5bn per quarter since the start of 2012.
Spending in the third quarter of 2015 was the highest in six quarters as Kuwait agreed with contractors to build its new Al-Zour refinery and this resurgence continued over the subsequent six-month period.
It is unclear whether the trend will continue as continued uncertainty over crude prices has left oil-and-gas-exporting countries in the regional looking to cut spending to balance budgets.
Most analysts expect crude prices to average under $40 a barrel in 2016 and are forecasting a moderate recovery in 2017 as global oversupply lessens.