The 50:50 joint venture, to be based in Al-Khobar, follows a memorandum of understanding signed between the two companies in August.

The two firms will co-operate to provide services in offshore construction and bid for engineering, procurement, construction, installation and commissioning contracts.

Swiber forecasts offshore capital expenditure in the Middle East in 2009 will be approximately $20bn.

It says lower oil prices are unlikely to have an impact on the capital expenditure of offshore oil and gas activities, as oil majors generally commit to investments years in advance and, in the long term, demand for oil is underpinned by the rising world population.