MODU Market Shrugs Off Contract Suspensions PDF

7/11/24, 10:33 PM MODU Market Shrugs Off Contract Suspensions MODU Market Shrugs Off Contract Suspensions Jul 7, 2024...

7/11/24, 10:33 PM MODU Market Shrugs Off Contract Suspensions MODU Market Shrugs Off Contract Suspensions Jul 7, 2024 The Middle East Gulf offshore market continues to exhibit strong growth in contract awards, even as it adjusts to the decision by Saudi NOC Aramco to suspend contracts for over 20 jack-up rigs. The Gulf region continues to contribute strongly to contract volumes in 2024. MSI tracked circa $50bn of contract awards during the first half of 2024, a rate which if continued will see 2024 capex spend outstrip levels seen in 2022 and 2023. The Middle East Gulf and South and Central America dominated awards accounting for about 55% and 30% of awards, respectively, according to MSI’s Q2 Source: MSI MODU Report. The announcement that Saudi Arabia will peg oil output at the current level of 12m b/d initially sent shockwaves through the MODU market – causing a downwards adjustment to demand growth projections. A number of the rig owners affected announced plans to market the jack-up rigs elsewhere or have scheduled in maintenance whilst the rigs aren’t working. This extra supply is expected to have a knock-on effect in the Asian and African markets where opportunities have already presented themselves for some of the suspended units. The decision by Saudi Aramco prompted MSI to revise its jack-up demand projection down for Q2 24 in the Middle East Gulf. The revised forecast still shows signs of growth in the region but has reduced from 4% to 1% for 2024. Demand growth is expected to be driven primarily by Qatar and the UAE who are both chasing oil and gas production targets. MSI has also revised down its charter rate growth projection by around 3% for standard jack-ups. Some of the rigs will also be stacked in Saudi Arabia to save https://www.oedigital.com/news/515005-modu-market-shrugs-off-contract-suspensions 1/2 7/11/24, 10:33 PM MODU Market Shrugs Off Contract Suspensions running costs and in anticipation of continued work once suspensions are over. Nonetheless, activity in the Middle Eastern Gulf remains strong as NOCs continue with key projects. Saipem won two contracts in Saudi Arabia for replacement of lateral lines at the Berri & Manifa oilfields and the addition of a 49km 48-inch trunkline at the Abu Safah oilfield. The contracts have a combined value of $700m. In the UAE, ADNOC awarded an EPCI contract for water injection pipelines and topside modifications on four existing wellhead platforms in the Lower Zakum development to NMDC Energies. Iran's Oil Ministry highlighted its ambition to increase output from its South Pars gas field, awarding $20bn worth of contracts to erect 28 platforms and install 56 compressors. The contracts were awarded to domestic companies including Petropars, OIEC, Khatam Al Anbiya Construction and Mapna Group. Offshore Drilling Oil and Gas © 2024 AtCoMedia. Inc https://www.oedigital.com/news/515005-modu-market-shrugs-off-contract-suspensions 2/2