Charting future growth in the Middle East

OE Staff

January 1, 2017

For McDermott International, the Middle East is a key region. Currently, it is one of five EPCI contractors with a long-term agreement with Saudi Aramco. OE spoke with Linh Austin, vice president and general manager, Middle East and Caspian, to get his views on activity in the region.

Load out of offshore platform installed through floatover method. Photo from McDermott.

OE: Have activity levels in the Middle Eastern offshore been impacted by the fall in oil price?

Yes, we have seen some impact; where projects are not critical to oil production there has been a slow down or in some instances we have seen them postponed indefinitely. However, with projects that are crucial for production there is still a strong market and we are still seeing good levels of activity, particularly in Saudi Arabia and Qatar. Our backlog is strong, we have several bids ongoing and have had some significant awards over 2016.

OE: What type of work is being contracted?

The majority of the awards we are seeing are for lump sum turnkey and EPCI (engineering, procurement, construction, installation) projects.

OE: Has McDermott grown its presence in the region these past couple of years?

Yes, we have grown and continue to grow. We have recently opened a 300-person office in Saudi Arabia and inaugurated our Dammam yard, with a recruitment drive in Al-Khobar to support localization objectives. This is in line with our commitment to the Saudi Arabia vision 2030 and Aramco’s IKTVA (In-Kingdom Total Value Add) program.

OE: Is it planning to grow further in the future?

Our outlook is positive. We anticipate further growth locally, particularly in support of the strong Saudi Arabia and Qatar markets. We also see potential opportunities in the United Arab Emirates market, when it picks back up, and in the longer term there are also opportunities in Kuwait and the Caspian.

OE: Where do you see future growth in the region?

We anticipate more brownfield work going forward due to the need for aging facilities, which need to be upgraded and maintained. McDermott has extensive brownfield experience, spanning six decades in the Middle East and therefore are well positioned to capitalize on this trend.

OE: Are there any particular technology needs in the region?

The Middle East fields are predominantly shallow water, which brings with it unique technical challenges. More than a particular technology it’s about continually learning and innovating to ensure consistent high levels of quality and safety and part of this is around having the right technology to support that focus.