In the 12 months to 31 March 2008, only $15bn worth of contracts were awarded, one-third of the $45bn awarded in the same period a year earlier.
The sharp fall in deals has raised fears that the sector may have come to the end of its three-year boom. However, a look at the project pipeline reveals a different picture.
The lull in activity in 2007 merely reflects overstretch in the market.
According to Gulf projects tracker MEED Projects, more than $60bn is scheduled to be awarded over the next year, which would make it the most lucrative period in the sector’s history in the region.
Over the coming 12 months, contracts will be awarded for Kuwait’s $15bn Al-Zour refinery, the $3.5bn Sahil, Asab and Shah (Sas) full-field development in Abu Dhabi, and the $5bn-plus Manifa heavy oil development in Saudi Arabia.
Given the volume of work in the pipeline, it is no surprise that contractors have been preparing. Wary of being caught out as before, they have steadily built up their resources to ensure they will be ready to take on the record workload.
And as projects awarded in the early part of the decade close, firms will be keen to see the expected awards made.