Middle East offshore spending rises to $33 billion this year

The $33bn that is likely to be spent on offshore upstream investment in the Middle East this year will almost double the $17bn spend in 2021 as energy demand recovers in key regions, supply chains are stretched and disrupted, and energy security becomes a growing concern.

The dramatic turnaround is highlighted in a recent report by Oslo-based analyst Rystad Energy. The big three oilfield service providers — SLB, Baker Hughes, and Halliburton — delivered “brilliant results” for the first three months of the year, a performance that will likely continue for at least the rest of this year and likely beyond.

First-quarter upstream revenue for SBL and Halliburton nearly reached levels not seen in the corresponding period in four years, Rystad said, while Baker Hughes’ numbers rose to an eight-year high.

Analysts predicted that the Middle East is likely to outperform all other regions in offshore upstream investment this year. Demand for oilfield services in the region is driving prices up along the supply chain due to capacity constraints, with jack-up rig demand up 30% year-on-year.

According to Rystad analysis, Baker Hughes’ oilfield service and equipment revenues in the Middle East and Asia grew 23%. Meanwhile, Halliburton’s sales growth was driven by expansion in Saudi Arabia, where all product line activities increased, supported by well construction services and increased project management activities. SLB experienced double-digit growth from drilling, intervention and appraisal activities in Saudi, UAE, Qatar and Oman.

Rystad noted that the three oilfield service companies continue to expand their activities in the low-carbon energy sector. SLB’s new energy division announced increased activity in the carbon capture and storage market with involvement in more than 30 projects worldwide.

Baker Hughes signed a Memorandum of Understanding with Fortescue Future Industries to explore opportunities to scale up and adopt energy technologies based on green hydrogen, green ammonia and geothermal sources. The company also entered into an agreement with HIF, an eFuels specialist, to study and develop technology to capture carbon dioxide directly from the atmosphere.

Halliburton is already active in the geothermal market, but expanded this business by entering into an emissions management joint venture with Siguler Guff, a private markets investment firm. In early April, following the close of the first quarter, Halliburton formed three new clean energy companies within its Halliburton Labs spin-off, Rystad said.

Source: News Network