Offshore Technology

Oil and gas industry sees 2023 contract volume fall, value remains stable

Investment in projects continued in 2023.

The oil and gas industry saw a decline of 22% in disclosed contract volume in 2023, down to 5,915 from 7,550 in 2022.

Despite the decrease in volume, the total value of the contracts remained stable. Large contracts were signed for major projects such as North Field South liquefied natural gas (LNG) in Qatar; Golden Pass LNG in the US; Hail and Ghasha field in the United Arab Emirates (UAE); Agopogo FPSO in Angola; and the expansion of the Amiral petrochemicals facility in Saudi Arabia amid challenging market conditions, according to GlobalData, Offshore Technology’s parent company.

A new report titled Oil and Gas Industry Annual Contracts Analytics by Region, Sector, Planned and Awarded Contracts and Top Contractors reveals that the total disclosed contract value was $187.48bn in 2023, only 1.2% lower than it was in 2022.

Pritam Kad, oil and gas analyst at GlobalData, said: “This resilience is attributed to high-value contracts from notable contractors such as Technip Energies and Consolidated Contractors that secured a $10bn EPCC [engineering, procurement, construction and commissioning] contract for QatarEnergy’s North Field South LNG project. Tecnimont’s $8.7bn contract; Saipem and NPCC Consortiums’ $8.2bn EPC [engineering, procurement and construction] contracts for the Hail and Ghasha Development Project in the UAE; Yinson Holdings’ $5.3bn Agogo FPSO [floating production storage and offloading] charter and maintenance; and Hyundai’s $5bn EPC work for the Amiral petrochemicals facility expansion in Saudi Arabia.”

Operations and maintenance represented 51% of total contracts in 2023, with procurement scope at 25%, and multiple scopes including construction, design and engineering, installation, procurement and asset retirement representing 12% of the contracts.

Kad added: “The oil and gas industry's ability to secure high-value contracts for major projects underscores its enduring strength and adaptability in navigating turbulent times.”

While contract value remained, the oil and gas industry, along with other energy sectors, produced record levels of methane in 2023, with the International Energy Agency saying “overall emissions remain far too high to meet the world’s climate goals”.