Oil and gas contracts drop by 30% in Q1, 2015

Energy deals fell to 95 from 136 in the last quarter of 2014

One of the major EPC contracts this year was Petrofac’s $4.3bn deal with KOC.
One of the major EPC contracts this year was Petrofac’s $4.3bn deal with KOC.

The number of oil and gas contracts awarded across the upstream, midstream and downstream sectors dropped 30% in the first quarter of 2015, a report by EIC Monitor has found.

A total of 95 energy deals were signed between January and March compared to 136 in the last quarter of 2014, and 149 in Q1, 2014.

The report found that in Q1 2015, a total of 39 major contracts - Engineering, Procurement & Construction (EPC), Front End Engineering Design (FEED) and Subsea, Umbilicals, Risers & Flowlines (Subsea/SURF) - were awarded across 30 upstream developments, falling 65% from 66 awards in Q4 2014 and 55 awards in Q1 2014.

One of the major EPC contracts this year was Petrofac’s $4.3bn agreement with Kuwait Oil Company (KOC) for the Lower Fars Heavy Oil Field Development in Kuwait.

In the GCC, the National Petroleum Construction Co (NPCC), a joint venture of Archirodon Group and Tecnimont, and Tecnicas Reunidas, scooped three major contracts with total value $410mn for Gasco Integrated Gas Development (IGD) Expansion in the UAE.

Oman awarded two FEED contracts to WorleyParsons for the Duqm Liquids Terminal and Amec Foster Wheeler for Duqm Oil Storage Terminal and Pipeline.

In Kazakhstan, North Caspian Sea Operating Company (NCSOC) awarded Saipem a contract worth $1.8bn to build two 95km pipelines.

“The significant value of these contracts demonstrates that while the overall number of awards has reduced, the value of those being made is still substantial,” the report said.

But it also warned that “long term investment plans and new discoveries could take a long time to come to fruition for industry players”.

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