The Middle Easts oil and gas sector started 2016 under a cloud of continued low crude prices, leaving contractors concerned about spending cuts by the regions national oil companies (NOCs).
Shrinking capital expenditure will likely be a reality. Abu Dhabi National Oil Company (Adnoc), one of the worlds largest oil producers, revealed toward the end of last year that it was aiming to cut spending by 25 per cent.
However, the value of engineering, procurement and construction (EPC) contracts since the start of the year has been in line with the average for recent years.
Over $10bn worth of EPC contracts were awarded in the Middle East and North Africa (Mena) oil, gas and chemicals sector from 1 January to 8 March, according to regional projects tracker MEED Projects. This compares to about $54bn and $67bn awarded for the entirety of 2015 and 2014 respectively.
Major projects include the $2.93bn deal awarded on Kuwait National Oil Companys (KNOC) liquefied natural gas (LNG) import terminal at Al-Zour. The contract was awarded to a South Korean consortium of Hyundai Engineering, Hyundai Engineering & Construction and Korea Gas Corporation.
US-listed McDermott was awarded a large contract on an offshore pipeline project in the Middle East. This contract, which is not included in the $10bn of total awards, is thought to be on a gas field in Qatar.
Major contracts on Saudi Aramcos Master Gas System Expansion pipelines also buoyed the oil and gas projects market in early 2016.
Although contractors are rightly worried about the potential for new work to dry up, the projects market appears to be robust over 18 months after crude prices began to collapse.
The real question is whether there will be a slowdown in new projects coming to the fore after NOCs have finished awarding schemes planned before the oil price crisis.