The global oil and gas industry’s disclosed contract value saw a “significant” quarter-on-quarter decline of 48 percent in the first quarter of 2023, data and analytics firm GlobalData explained.
This value decreased from $64.9 billion in the fourth quarter of 2022 to $34.01 billion in the first quarter of 2023, according to a new report from the company. Contract volume also decreased from 1,623 in the fourth quarter of 2022 to 1,440 in the first quarter of 2023, the company noted in a statement sent to Rigzone.
The operation and maintenance (O&M) segment accounted for 57 percent of total contracts in the first quarter of this year, followed by contracts with procurement scope at 17 percent, and contracts with multiple scopes, such as construction, design and engineering, installation, O&M and procurement – with 14%, GlobalData revealed in the statement. In a chart accompanying the statement, the company highlighted that there were 815 O&M contracts, 249 procurement contracts and 198 multi-scope contracts in the first quarter of this year.
Highlighting some of the “notable” contracts during the quarter, GlobalData noted a 15-year contract extension secured by affiliates of Yinson Holdings for charter and O&M services of the Agogo Floating, Production, Storage and Offloading (FPSO) in Angola, and a five-year contract won by ADNOC Logistics & Services for integrated logistics services by ADNOC Offshore in the United Arab Emirates.
Another contract highlighted by GlobalData was DL E&C with a consortium led by Hyundai Engineering & Construction for the construction of Thermal Crude to Chemicals (TC2C) facilities and an interconnection package for the ethylene and propylene project Shaheen of S-Oil in Ulsan, South Korea.
“Contract value momentum appears to have slowed due to high interest rates and a rising inflationary environment in major economies,” Pritam Kad, oil and gas analyst at GlobalData, said in a statement of the company
“This could have resulted in fewer high-value contracts during the quarter in the oil and gas space,” Kad added in the statement.
Remarkable offers
On February 28, Yinson Production announced that, through wholly-owned subsidiaries, it had entered into a firm contract with Eni Angola SpA for the supply, operation and maintenance of an FPSO for the West Central Development Project integrated from Agogo to Angola. The company noted at the time that the contract has an estimated aggregate value of approximately $5.3 billion and disclosed that it has an option to extend it for another five years.
On March 29, ADNOC Logistics & Services unveiled its integrated logistics services platform, which it described as one of the world’s largest turnkey offshore logistics offerings, and as part of the launch, the company announced that had signed a $2.6 billion contract. with ADNOC Offshore to provide integrated logistics services. This agreement has the option of a five-year extension and includes the provision of port services, warehouse operations, heavy lifting, material handling and shipping, rig and barge movements, marine terminal operations and waste management, ADNOC disclosed at the time.
On March 10, DL E&C announced that it will participate in the Shaheen project, which it described as the largest domestic petrochemical project ever. The company said at the time that it will participate in the project by taking over part of the construction of Package 1 from a Hyundai E&C consortium. Package 1 is worth approximately $4.08 billion (KRW 5.4 trillion) and DL E&C’s stake is 26 percent or $1.05 billion (KRW 1.4 trillion), the company noted at the time, adding that the construction period is 42 months.
Contract value 2022
In a statement published on its website in March, GlobalData noted that the oil and gas industry saw a three percent year-on-year increase in total contract value in 2022, despite a four percent decline in contract volume.
“The rollercoaster ride during the Covid-19 pandemic appears to be coming to an end, with contract activity returning to normal for the global oil and gas industry, despite the ongoing conflict between Russia and Ukraine and the crude oil price volatility,” GlobalData said. in a company statement at the time.
“The oil and gas industry is likely to see some relief in the short term, but environmental concerns and recent advances towards sustainable green fuel and energy transition projects will present some significant challenges to long-term growth” , Kad said. in a statement from the company in March.
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