Natural gas and downstream projects remain major growth areas. (Image source: Adobe Stock)

SABEQ’s managing director, Sreenivasa Shenoy, discusses how decarbonisation, advanced materials, and data-driven engineering are redefining performance expectations across the energy value chain

Oil Review Middle East (ORME): Decarbonisation and lifecycle performance are central to today’s energy transition. How is this influencing the selection and qualification of project materials?

Sreenivasa Shenoy (SS): The global drive toward decarbonisation is accelerating the demand for materials that extend service life, minimise fugitive emissions, and reduce maintenance-related carbon impact. We are seeing increased specification of 3LPE, FBE, and PTFE coating systems for pipelines and process lines, alongside a shift toward forged components that deliver higher mechanical strength and dimensional integrity. The focus is no longer only on corrosion resistance — but on overall system reliability and total cost of ownership. This evolution aligns material selection with ESG and operational efficiency goals.

ORME: With digitalisation and AI integration advancing, how do you see these technologies transforming material engineering and procurement practices?

SS: AI and digital twins are already influencing material verification and design optimisation. Predictive analytics can assess coating degradation rates, weld performance, or corrosion under insulation based on real data from field operations. This enables more accurate material selection and lifecycle planning. On the supply side, digital traceability and automated document validation are enhancing compliance with international standards. For suppliers like SABEQ, the ability to provide structured documentation, MTC validation, and integrated QA/QC data will be critical to align with the industry’s digital transformation.

ORME: Where do you see the strongest material demand in the coming project cycles?

SS: Natural gas and downstream industrial projects remain major growth areas. As gas is recognised as a lower-carbon transition fuel, there is continued demand for high-performance piping, valves, and forged fittings suitable for cryogenic and high-pressure applications. We are also observing greater adoption of duplex and nickel alloys in critical service conditions, where temperature and corrosion challenges require advanced metallurgy. In parallel, the need for certified coating solutions and field-applied rehabilitation systems continues to expand.

ORME: What differentiates SABEQ in the current project materials landscape?

SS: Our strength lies in combining technical expertise with process discipline. We engage early in the specification stage, ensuring materials meet project-specific mechanical and corrosion requirements. SABEQ’s integrated approach — from coating qualification and third-party inspection to traceable documentation — helps EPCs and end users mitigate risk. We focus on engineering-led supply, where every product delivered supports design integrity, operational safety, and audit compliance.

The Middle East offshore drilling rig market is undergoing a significant recalibration, says Teresa Wilkie, director – RigLogix at Westwood Global Energy Group

Following a few years of aggressive supply expansion, particularly in Saudi Arabia, the region continues to grapple with the fallout from rig suspensions and shifting investment priorities.
Between 2021 and 2024, the Middle East jackup market saw a dramatic increase in activity. Saudi Aramco’s push to grow its working jackup fleet from the mid-50s to 90 units drove a surge in marketed supply in the region, which peaked at an annual total of 183 units in 2024 – a 31% increase from 2021. This expansion was supported by reactivations, newbuild deliveries, and rig relocations from across the globe.

However, in early 2024, Aramco revised its plans, leading to the suspension or termination of 36 jackups and leaving drilling contractors to reassess their fleet strategies. Many of these rigs have been redeployed, with several regions absorbing the majority of excess capacity such as West Africa, Southeast Asia, China, other parts of the Middle East, as well as Brazil and Mexico to a smaller extent. Drilling contractors have also taken measures to rebalance their fleets and the wider global market, such as moving units to cold stack, selling these assets for non-drilling purposes, or returning bareboat-chartered jackups to their owners.

While Middle Eastern committed utilisation remains relatively high at 89%, actual working utilisation has dropped to 83%, and this supply and demand imbalance is now showing up in pricing.
Global jackup dayrates have dropped by around 17% year-to-date versus the full year figure for 2024, as contractors face intense competition, with more rigs chasing fewer opportunities following the influx of available supply from Saudi Arabia. The result? Lower bids, tighter margins, and a clear shift in operator leverage. Dayrates for contracts fixed in the Gulf Cooperation Council (GCC) this year are sitting around 16% lower on average when compared to contracts fixed in 2023.

Signs of market uptick

Despite the recent disruptions, the Middle East remains a cornerstone of offshore drilling. Qatar and the UAE continue to invest in major offshore gas projects, and Saudi Arabia is still pursuing brownfield revitalisation, albeit at a slower pace. These developments provide a foundation for continued rig demand.

The region’s long-term fundamentals remain strong. Committed utilisation figures shows that future backlog is still healthy, especially now that Saudi Aramco has started calling back some of the remaining idle rigs (with current indications that it could take back six to nine rigs from early 2026) and award activity in the region this year is already higher than it was for the full year of 2024. Meanwhile, the redeployment, cold stacking and retiring of rigs has helped mitigate some of the supply surplus.

Global implications and strategic lessons

The Middle East jackup market is transitioning from a phase of aggressive expansion to one of strategic recalibration. Saudi Aramco’s rig suspensions have reshaped the regional and global landscape, but the absorption of rigs to other markets and continued investment in gas and brownfield projects suggest that the market will remain buoyant.

The redeployment of rigs from Saudi Arabia underscores the importance of fleet flexibility and geographic diversification. Drilling contractors with the ability to quickly reposition assets have fared better, while those heavily exposed to the Middle East have faced greater challenges.

Alex Myers, president - India, Middle East & CIS, Sulzer Services. (Image source: Sulzer)

Localisation should be a boon rather than a burden, says Alex Myers, president - India, Middle East & CIS, Sulzer Services

International oil companies (IOCs) are expanding operations in the region to develop major opportunities arising from projects such as Qatar’s North Field expansion and Saudi Arabia’s gas developments.

What is hidden by the headlines are the complexities these businesses must navigate to operate successfully in the Middle East. The region overall is prioritising localisation, but each country additionally operates to its own set of specific priorities. Expansion into the region needs to factor in the realities on the ground, including the relevant regulations in individual markets.

But that compliance doesn’t need to be all cost and no benefit. In fact, companies operating in the region can take advantage of the trend toward localisation as an opportunity for enhancing the speed and efficiency of service they can deliver and receive.

Think local, act local

Since 2015, 200,000 jobs have been created and sustained due to Saudi Arabia’s In-Kingdom Total Value Add (IKTVA) score, and 67% of Aramco’s procurement spending has contributed to local content as of 2024. Across the border to the south, a process of Omanization to protect employment for Omani citizens has been underway for a number of years and is now accelerating. Last year, 30 new professions were added to the list of jobs reserved for Omani citizens, and businesses must adhere to prescribed Omanization percentages or forgo the opportunity to contract for government entities and state-owned companies.

In the UAE, the number of Emiratis employed in companies holding ICV (In-Country Value) certificates reached 19,000 in the first half of 2024, a 40% increase over the first half of 2023, according to official figures. While Qatar’s Tawteen initiative, launched through QatarEnergy, has driven the local contribution of the energy sector up from 14% to 28.5% and created an estimated 7,000 jobs.

Many countries in the region have large numbers of young people, such as in Saudi Arabia where almost three-quarters of citizens are between 15 and 64 years old and in Iraq where the median age is 21.

Providing employment for citizens is one of the major priorities of the trend of localisation sweeping the Middle East, but there are important distinctions between countries, where the focus can vary greatly.

Qatar has a population of just three million, and less than 12% of that number are Qatari. This places less pressure on local jobs specifically, but makes it more important for the country’s oil and gas sector to have easy access to in-country capabilities. There are often barriers to the transfer of capabilities and equipment across borders. Iraq has a particularly cumbersome process for shipping state-owned equipment out of the country, which requires bank guarantees that can take six months to finalise.

More than the regulatory environment or government objectives, every country in the region has its own cultural sensitivities and particularities about how best to operate. That includes everything from language to the unwritten rules of business interactions that citizens live by, but outsiders could easily miss.

Putting your partnerships first

For IOCs, there is a pressure to find service providers who can reliably meet the full range of their equipment needs over the long term. In the context of increasing localisation, that can make it even more challenging to find the right partner. However, there are certain features that make potential providers more reliable options.

One criterion is that the company is invested in local infrastructure, which could be through a partnership with, or through an acquisition of, local companies owned and operated by the citizens of that country.

That would enable the provider to satisfy the growing regulatory and cultural expectations of Middle Eastern states and increase the likelihood that an IOC can rely on them for the foreseeable future. Or it could be that the provider has a strong focus on internal talent development to foster the engineers of tomorrow.

Having local expertise ensures providers have a deep understanding of the specific challenges faced by IOCs, enabling customisable solutions that get the most out of local capabilities and supply chains.

That allows for things like the longer tender procedures common in Iraq, for example.

An in-country presence also supports a reduction in the time it takes to deploy expertise quickly to oil and gas customer sites within a country. Or, where an in-country presence is not possible, deployment across the borders of neighbouring countries is the next best option. This proximity translates into a speedier diagnosis of problems with plant machinery and decreased turnaround time for their repairs, which is vital in an industry where unplanned downtime can be costly.

A race against downtime

An IOC in Qatar faced this downtime challenge recently due to a critical planned maintenance shutdown that required the overhaul of 31 pieces of equipment, including motors, pumps, compressors, turboexpanders, fans, and a steam turbine, in just 35 days. Missing the deadline would result in millions of dollars in lost revenue.

Sulzer was tasked with overhauling all equipment within this limited timeframe while ensuring no lost time incidents (LTIs) occurred during the high-stakes project. To do this, we assembled a global team of over 150 experts, implemented detailed planning, allocated resources ahead of time, and conducted comprehensive work maps and process control procedures for each piece of equipment. This is where our local workshop in Qatar is a crucial advantage for faster, on-site support. The result was a successfully completed project three days ahead of schedule, delivering over 52,000 man-hours of work with zero LTIs. That is just one of many cases where our local presence enabled us to deliver at speed, meaning the customer could resume delivering essential energy supply earlier than expected.

In the Middle East, it is important to invest in local expertise and infrastructure so that we are not simply responding to trends but also enhancing our ability to service customers and create value for the region’s energy sector. With the right approach, localisation should be a boon rather than a burden. Sulzer’s own journey reflects this learning: from a single sales office, we have built seven fully operational service centres across the Middle East and India in just six years, employing several hundred people – including more than 200 in Saudi Arabia, 38% of whom are Saudi nationals – demonstrating how deeply we are invested in the region’s growth and long-term success.

The contract will be delivered by Wood exployees based in Iraq and the UAE. (Image source: Wood)

Wood, a global leader in consulting and engineering, has won a new contract to deliver project management and engineering services for PetroChina at the West Qurna 1 oilfield in southern Iraq

Under the contract, Wood will manage engineering, procurement and construction projects.

Located approximately 50 km north-west of Basra, West Qurna 1 is one of the world’s largest oilfields, holding more than 20bn barrels of recoverable reserves. Currently producing around 550,000 bpd it is a cornerstone of Iraq’s energy infrastructure.

Ellis Renforth, president of Operations, Europe, Africa and Middle East at Wood, said: “The West Qurna 1 field underpins the nation’s energy security and contributes significantly to its economic resilience. This contract award deepens our decade-long partnership at West Qurna 1 and reflects the continued trust placed in Wood to deliver complex energy solutions in Iraq.

“We’re proud to combine our global expertise with a strong local workforce to help support Iraq’s energy ambitions.”

The contract will be delivered by nearly 200 Wood employees based in Iraq and the United Arab Emirates.

Wood has a longstanding involvement in Iraq and the Middle East, and has invested heavily in local training, competency and skills development.

Last year, Wood was awarded a US$46mn, three-year contract by TotalEnergies in Iraq related to Iraq’s Associated Gas Upstream Project, part of the Gas Growth Integrated Project (GGIP) in Southern Iraq. Wood is providing front-end engineering design (FEED), detailed design, procurement support, and construction and commissioning assistance for the first phase of the project.