Annual Global Oil & Gas Industry Contracts Review - 2020 Contracts activity remains subdued due to crude price volatility, capex reduction and COVID-19
Annual global Oil & Gas industry contracts review – 2020, contracts activity remains subdued due to crude price volatility, Capex reduction, and COVID-19
Global oil and gas contracts activity reported a decrease of 28% gain in the number of contracts, from 6,971 in 2019 to 5,014 in 2020. Alongside, the contract value reported a decrease of 38% to US$151.06 billion in 2019, as compared to US$94.29 billion in 2020. The significant drop in contracts and contract value was primarily attributed to the slowdown in the industry following the crude oil prices and COVID- 19 pandemic during 2020, which saw less/reduction in capital expenditure by the producing companies and slower activity.
An all-inclusive analysis of Oil and Gas Contracts:
The oil and gas industry reported 5,014 contracts during 2020. Some of the top contractors were Petrofac, J. Christof E&P Services and Bonatti in the upstream sector; DSME, Korea Shipbuilding & Samsung Consortium, China State Shipbuilding and Samsung Heavy Industries in the midstream sector, and Samsung Engineering, JGC Holdings and Asociados Constructores in the downstream sector.
Key findings discussed in the report:
- Contract from South Refineries Company: JGC has secured a lump sum contract worth JPY400 billion (US$3.74 billion) from South Refineries Company (SRC) for the Engineering, Procurement, Construction, and Commissioning (EPCC) of Fluid Catalytic Cracking unit (FCC) of 34,500 barrels per day (bpd), Vacuum Distillation Unit (VDU) of 55,000bpd and Diesel Desulfurization unit of 40,000bpd for the upgrade of Basra refinery project in AlBasrah, Iraq
- Oil and Gas Contracts: Global oil and gas contracts activity reported a decrease of 21% in the number of contracts, from 1,441 in the pre-Covid quarter, Q1 2020 to 1,145 in Q4 2020
- Status of Contracts: Upstream sector reported 3,401 contracts during 2020, followed by the midstream and downstream/petrochemical sectors with 949 and 709 contracts, respectively during the year
- Numbers of Contracts: O&M recorded the maximum number of contracts, with 2,563 contracts during Q4 2020, with a majority of contracts being related to rigs, drilling, and support vessels charters to support exploration and production activity in the upstream sector
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