Qatar records 29% year-on-year jump in contracts awarded to $19bn in 2023: Kamco Invest

Powered by the hydrocarbons sector, the total value of contracts awarded in Qatar rose 29.1% year-on-year to $19bn during 2023, according to Kamco Invest, a regional economic thinktank.The growth in contract awards was primarily due to the jump in value of projects awarded in Qatar’s gas sector during 2023, which represented 61.1% of the total contracts awarded in the country during the year.Total value of gas sector projects awarded jumped from $6.5bn during 2022 to $11.6bn during 2023. The growth of the gas sector’s total value of contracts awarded during the year was mainly due to the $10bn engineering, procurement, and construction (EPC) contract for the North Field South project, which aims to construct two mega LNG (liquefied natural gas) trains with a total capacity of 16mn tonnes of LNG per annum.Total value of contracts awarded in Qatar’s oil sector witnessed 19.2 times jump to $2.9bn during 2023. The construction sector, however, witnessed a 42.5% decline in total value of projects awarded during the year to $580mn.In the third quarter of the year, North Oil Company, the Qatari oil producer, selected contractors for four main EPC packages of the third phase of expansion of Al-Shaheen offshore field production that currently has a production capacity of 300,000 bpd (barrels per day).The overall Al-Shaheen oil field is Qatari’s largest oil field and has been producing oil for over 28 years. The third phase expansion contract to expand the fields’ oil production is valued at $6bn, according to MEED Projects.Elsewhere in the Gulf Co-operation Council (GCC), Kamco Invest expects the project market to be at par with 2023 levels, given the strong pipeline as well as the reforms being formulated by the governments in the region to move the economy away from the dependence on oil revenues.The efforts are also evident in the real GDP (gross domestic product) growth expectations for 2024. The GCC countries are expected to witness stronger economic growth in 2024 after sluggish performance in 2023 that was affected by Opec+ oil production cuts.According to MEED Projects, the total value of projects in the Middle East and North Africa region that are in the bidding phase or due for an award in 2024 is expected to surpass $27bn.In terms of outlook for contract awards in 2024, according to MEED Projects, Saudi Arabia leads in the GCC with $107.2bn in expected contract awards, followed by UAE and Kuwait with expected awards at $51.5bn and $19.8bn, respectively.The GCC countries comprise 80% or $216bn of the Mena region’s aggregate value of contracts that are in a bidding phase or due for an award in 2024.According to MEED Projects, there is more than $105bn worth of contracts in the bid evaluation phase in the GCC and a further more than $130bn of contracts in the tender or pre-qualification stage.The biggest project that is in both the bidding and in the bid evaluation phase in the GCC is the $7bn ‘UZ1000’ expansion by Abu Dhabi National Oil Company (Adnoc Offshore) for the construction of surface facilities at the Upper Zakum oil field.The second largest contract that is currently in both the bidding and evaluation phases simultaneously is the $6bn Duwaiheen project to develop two 2,800MW nuclear reactors in Saudi Arabia.In Kuwait, the $4bn Al-Zhour North independent water and power project (phases one to three) tops the list as the largest contracts in the bid phase or due for an award during the year in the country.In terms of contract awards by sector in 2024, the GCC power sector is expected to be the strongest sector with the value of projects in bid and due for award phases at $59.7bn, followed by the transport sector at $53.1bn.