The combined value of the 361 active oil and gas projects in the GCC has crossed $331.4 billion in November 2017, according to a report by BNC Network, a leading project research and intelligence provider in the Middle East and North Africa (Mena) region.

Hydrocarbon sector represents 30 per cent of the GCC economy and 60 per cent of the total exports value, the company said in its latest Oil and Gas Construction Analytics report. The construction projects of the GCC’s oil and gas sector constitutes two per cent of all active projects in the region and in dollar terms, while these projects account for 14 per cent of the total estimated value, that reflects relatively high value of average energy projects, compared to other civil engineering and construction projects. 

Although average oil price has recovered to $51.82 per barrel year-to-date in 2017, from the 13-year lowest average price per barrel of $42.55 in 2016, this is less than half of the $111.63 per barrel recorded in 2012 – the highest crude price ever, according to the Statistics Portal.

“World oil demand growth in 2017 is now expected to increase by 1.5 million barrels per day (bpd), representing an upward revision of around 30 tb/d from last previous report, mainly reflecting recent data showing an improvement in economic activities, according to the latest Monthly Oil Market Report, issued in October by the Organisation of Petroleum Exporting Countries (Opec).

“In 2018, world oil demand is anticipated to grow by 1.4 million bpd following an upward adjustment of 30 tb/d over the previous report, due to the improving economic outlook in the world economy, particularly China and Russia,” stated the report.

According to the BNC report, during the third quarter, a total of 17 projects with a combined estimated value of $22.05 billion were announced in the GCC’s oil and gas sector, despite a low-oil price environment where oil price has been hovering around $50 per barrel.

During that period, the number of oil and gas projects in the GCC increased by 6 per cent as compared to the second quarter of 2017 and the total estimated value of these projects increased by 5 per cent, it stated.

Avin Gidwani, the chief executive of BNC Network, said: “The renewed optimism in the global economy and a slight increase in demand is reflected in the latest Oil and Gas Construction Analytics issued by BNC Network – with the announcement of 17 new oil and gas projects, worth $22.05 billion in the third quarter of 2017 – that pushed up the number of energy projects to 361 with a combined value of a whopping $331.4 billion.”

A total of 10 oil and gas projects with a combined estimated value of $5.6 billion moved to construction from other stages during the third quarter. The largest oil and gas project to be awarded in the third quarter was Phase 1 of Duqm Refinery and Petrochemical Complex located in Oman worth $2.75 billion.