Top 10 billion dollar oil deals of the summer

The biggest deals being struck in the oil & gas industry

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It will come as no surprise to most people that the news agenda in the oil and gas industry is currently being dominated by second quarter tales of woe from almost every company publishing its revenues - well everyone except for the credit crunch defying Petrofac. 

However, while the oil and gas industry is proving to be far more robust than almost every other sector it is still not much fun for journalists to write stories that seem to contain the exact same quote from each CEO: "The slump in both price and demand for .... (insert oil/gas/petrochemicals products here) has meant that ..... (insert company here) has experienced a difficult first six months of 2009. 

So with this in mind thought that we should give you the billion dollar deals of the summer. We wanted to let everyone know that it is not all doom and gloom out there in oil & gas. The industry is still a hive of activity and there are still  huge deals being struck every week right across every sector of oil, gas and petrochemicals. 

The list is ranked from highest to lowest in terms of dollar value and the only criteria we set for inclusion on the list was that each deal needed to have some connection to the MENA region. 

If you think that another deal should have made the list please feel free to leave a comment.

  1. Nassiriya Oilfield (Iraq)
  2. Integrated Gas Development Project (UAE)
  3. South Pars Gas Field (Iran)
  4. Jubail Export Refinery (Saudi Arabia)
  5. Tianjin Petrochemicals Complex (China)
  6. Touat Gas Field (Algeria)
  7. Gassi Touil Gas Field (Algeria)
  8. Skikda Refinery Upgrade (Algeria)
  9. Sipchem Polyvinyl Plants (Saudi Arabia)
  10. Borouge (UAE)

Nassiriya Oilfield (Iraq)

The Deal: Multiple EPC works
Worth: $10 billion
Awarded to: Nippon Oil Corp consortium (Japan) or Eni (Italy)

The massive US$10 billion EPC contract for the super giant field will be the largest awarded in Iraq since the fall of Saddam Hussein and is set to be awarded within the next few weeks.

Two bidders are left in the race – a consortium led by Japanese oil refiner Nippon Corp  including oil exploration and developer Inpex Corp and the respected engineering contractor JGC Corp as well as the Italian supermajor Eni. The contract includes the construction of  both refining and power-generating facilities.

The Iraq Oil Ministry hopes that Nassiriya will yield 150,000 barrels per day (bpd) within two years rising to 600,000 bpd after that.

Eni has estimated that the field has the potential output of up to 1 million bpd.

Integrated Gas Development Project (UAE)

The Deal: Process Plant Contract
Worth: US$4.7 billion
Awarded to: JGC (Japan) and Tecnimont (Italy)

The Deal: Offsites and Utilities
Worth: $1.7 billion
Awarded to: Hyundai Engineering & Construction (South Korea)

The Deal: Ruwais Fourth NGL train
Worth: $2.1 billion
Awarded to: GS Engineering (South Korea) and Petrofac (UK)

The Integrated Gas Development Project (IGDP) is the multi-billion dollar offshore gas  initiative being undertaken by subsidiaries of the Abu Dhabi National Oil Company (ADNOC) - Abu Dhabi Gas Industries Ltd. (GASCO) and Abu Dhabi Gas Liquefaction Company Ltd (ADGAS). 

The IGDP will transfer 1 billion standard cubic feet per day (scfd) of gas from the offshore fields at Umm Shaif and Khuff via Das Island and processed by four gas processing trains with a combined processing capacity of 2 billion scfd of gas.

GASCO recently awarded US$9.6 billion of contracts for the project of which the three listed above were over the magic billion dollar mark.

South Pars Gas Field (Iran)

The Deal: Phase 11 South Pars Gas Field
Worth: $4.7 billion
Awarded to: China National Petroleum Corporation (CNPC)

Iran shares the South Pars gas field with Qatar, but that is where any similarity between the two countries ends.

Whereas Qatar has been spending much of the wealth its hydrocarbons industry has earned on vast investment in its liquefied natural gas infrastructure, Iran has struggled to keep up. There are many reasons behind this, but the major obstacle for the country is the UN sanctions imposed because of its nuclear ambitions.

However, Phase 11 of the South Pars field will hopefully put Iran back on track. The contract, worth US$4.7 billion will see the Chinese company develop a 1.76 billion cubic feet per day (bcf/d) of natural gas from the massive field.

This concession had originally been awarded to Total, Iran decided to award Phase 11 to CNPC another company after the French supermajor repeatedly delayed signing the contract.

Jubail Export Refinery (Saudi Arabia)

The Deal: Conversion Unit
Worth: $1.7 billion (estimated)
Awarded to: Technip (France)

The Deal: Offsites and Utilities
Worth: $1.3 billion (estimated)
Awarded to: Technip & CTCI (Taiwan)

The Deal: Distillation and Hydrotreating
Worth: $1.67 billion
Awarded to: Tecnicas Reunidas (Spain)

Saudi Aramco and Total are to invest US$9.6 billion on the Saudi Aramco Total Refining Co (Satorp) oil refinery at Jubail in the KSA.

The Jubail Export Refinery refinery will process Arabian Heavy crude and have a capacity of 400,000 barrels per day. It  will also produce 700,000 metric tonnes per annum (mtpa) of paraxylene, 140,000 mtpa of benzene and 200,000 mtpa of polymer-grade propylene.

The initial budget of $12 billion was trimmed to $9.6 billion after the project was delayed otherwise at least another two contracts would have made this list.

Tianjin Petrochemicals Complex (China)

The Deal: Construction and operation of petrochemical complex.
Worth: $3 billion
Awarded to: A 50/50 joint venture between SABIC (Saudi Arabia) and Sinopec (China)

Saudi Basic Industries Corporation (SABIC) recently received official approval from the Chinese National Development and Reform Commission (NDRC) to participate jointly with China Petroleum & Chemical Corporation (Sinopec) in the huge US$3 billion  petrochemical complex currently under construction in China.

The complex is due for completion in September 2009  will have an overall production capacity is rated at approximately 3.2 million mtpa of various petrochemical products, including one million mtpa of ethylene and other downstream products such as polyethylenes, ethylene glycol, polypropylene (PP), butadiene, phenol, and butene-1.

China is a massive market for SABIC and is anything can drag the company out of the current malaise it finds itself in due to the drop in both price and global demand for its vast array of petrochemical products it is this.

Touat Gas Field (Algeria)

The Deal: Development of the Touat Gas Field
Worth: $1.5 billion
Awarded to: A 65/35 joint venture between GDF Suez  and Sonatrach

Algerian state-owned hydrocarbons giant Sonatrach has rarely been out of the news this summer as it ramps up its massive investment in Algeria’s oil and gas infrastructure.

The French company is willing to spend US$1.5 billion on developing the field with working starting this year and production starting in 2013.

Work will begin in 2009 with the start of output planned for 2013. Peak production should reach about 4.5 billion cubic metres of natural gas per year.

The Touat gas field is believed to hold 445 million barrels of oil equivalent and it is estimated that production should last until 2030-2033.

Gassi Touil Gas Field (Algeria)

The Deal: Multiple EPC works
Worth: $1.36 billion
Awarded to: JGC Corporation (Japan)

In an interview recently published interview on Sonatrach CEO Mohamed Meziane said that the company will invest US$65 billion in Algeria’s hydrocarbons sector. If the state-owned company keeps investing at its current rate that figure will soon be surpassed.

Algeria’s vast onshore gas reserves are a major beneficiary of the massive investment plan and the Gassi Touil gas field is no exception. The EPC contract will run for 42 months and consists of the necessary installations for process, a collection network of 54 wells from seven gas fields and the construction of lines of products evacuations and the infrastructures utilities.

Works on the contract are due to completion by 2012.

Skikda Refinery Upgrade (Algeria)

The Deal: Skikda  refinery upgrade
Worth: $1.28 billion (estimated)
Awarded to: Samsung Engineering and Construction (South Korea)

The ever-busy Sonatrach make the list again, this time with a joint venture to develop the Touat gas field in southwest Algeria.

One of the key contract awards was the US$1.28 billion EPC contract for the modernisation of its oil refining facility in Skikda, on the eastern coast of the country.

The 36 month lump-sum contract involves the refurbishment of existing units and the installation of several new units including a benzene recovery plant and a paraxylene production facility.

The upgrades are part of Algeria’s plans to almost double national refinery capacity by 2014 where the facility in Skikda is expected to add another 1.6 million tonnes per annum (tpa) to its current output of 15 million tpa.

Sipchem Polyvinyl Plants (Saudi Arabia)

The Deal: Two petrochemicals plants
Worth: $1.1 billion
Awarded to: Joint venture with Hanwha Chemical (South Korea)

The $1.1 billion  Saudi International Petrochemical Co (Sipchem) joint venture will establish a new petrochemical company in Al-Jubail Industrial City in Saudi Arabia.

The joint venture will see the construction of a 200,000 metric tons per year (mtpa) ethylene vinyl acetate (EVA) plant and a facilicity that will produce 125,000 mtpa of polyvinyl products.

The plants will be built at the Sipchem site in Al-Jubail are expected to become operational by 2013.

Borouge (UAE)

The Deal: 1.5 million mtpa Ethane Cracker
Worth: $1.1 billion
Awarded to: Linde Group (Germany)

The Abu Dhabi Polymers Company (Borouge) was set up by ADNOC to take advantage of the abundance of feedstock in the UAE.

The Borouge plant located in Ruwais recently completed its phase two expansion and work has now started on phase three. 

Part of the phase three expansion is the construction of another ethane cracker with a capacity of 1.5 million metric tonnes per annum (mtpa).

The new cracker is the third to be built by the German contractor for Borouge. The others are the existing 600,000 mtpa cracker and  a 1.5 million mtpa cracker currently being constructed.

When the works are fully completed in 2013 the plant will have a capacity of 4.5 million mtpa of polyolefins and Borouge will have the world’s largest ethane cracker complex.

In addition to the ethane cracker, the expansion includes the construction of second generation Borstar polypropylene and polyethylene units, a low density polyethylene unit and a butene unit, as well as related off-site utilities and marine facilities.

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