Industry

SLB experienced record Middle East revenues in 2024. (Image source: Adobe Stock)

SLB saw Middle East and Asia revenues rise by 18% in 2024, the strongest performance of any of its regions globally, with total full-year global revenue of US$36.29bn showing a 10% increase year on year

Revenue in the Middle East & Asia of US$3.38bn increased 2% sequentially in the fourth quarter, driven by strong activity in the United Arab Emirates, higher drilling in Egypt, and increased stimulation, intervention and evaluation activity in Qatar. These gains offset weaker performance in Saudi Arabia and Australia. Year on year, revenue grew 7%, reflecting robust activity in the United Arab Emirates, Iraq, Kuwait, East Asia, China and Indonesia, partially offset by reduced drilling in India.

In terms of contracts awarded in the region, Petroleum Development Oman awarded SLB a five-year contract for well placement services throughout its Block 6 concession. SLB will provide multiple key technologies, including PowerDrive Orbit™ system and the PeriScope HD™ service, across a variety of gas and oil fields, for both development and exploration wells. Also in Oman, Daleel Petroleum LLC awarded SLB a five-year contract for advanced measurements-while-drilling (MWD) and directional drilling services in its Block 5 concession, with an expected delivery of more than 250 wells.

In terms of technology deployment, Kuwait, SLB and Kuwait Oil Company tackled significant challenges in the mature Bahrah Field by using an advanced openhole multistage completion design and OpenPath Flex acid stimulation service. The project achieved Kuwait's longest lateral at 13,800 feet, incorporating 29 treatment stages with up to three acid fracturing stages daily.

Digital technology highlights

Notable highlights in the digital technology sector included the award of a multiyear digital contract from Egypt’s Khalda Petroleum Company for Petrel subsurface software technology in addition to a long-term contract for seismic imaging and processing over the West Kalabsha and Shushan concessions.

In the low-carbon energy sector, SLB entered into an agreement with Aramco and Linde that paves the way for the development of a carbon capture and storage (CCS) hub in Jubail, Saudi Arabia, set to become one of the largest globally.

“2024 was a strong year for SLB as we successfully navigated evolving market conditions to deliver revenue and EBITDA growth, margin expansion and solid free cash flow,” said SLB chief executive officer Olivier Le Peuch.

“On a divisional basis, Digital & Integration led revenue performance, driven by increased demand for digital products and solutions, while Production Systems benefited from strong backlog conversion as customers continued to invest in maximizing recovery from existing assets.

“Accelerated adoption of our digital technologies marked a milestone year, highlighted by strategic collaborations with cross-industry leaders, the launch of the Lumi data and AI platform, new Performance Live centers to enable remote operations, and the achievement of fully autonomous drilling operations.

“While upstream investment growth will remain subdued in the short term due to global oversupply, we anticipate the oil supply imbalance will gradually abate. Global economic growth and a heightened focus on energy security, coupled with rising energy demand from AI and data centres will support the investment outlook for the oil and gas industry throughout the rest of the decade,” Le Peuch said.

When fully operational, the plant will more than double ADNOC's LNG production capacity. (Image source: ADNOC)

ADNOC Gas plc has awarded three contracts worth US$2.1bn for an LNG pre-conditioning plant (LPP), compression facilities and transmission pipelines to supply feedstock to the Ruwais LNG Project

The LPP and compression facilities will be located within ADNOC Gas’ Habshan 5 plant, part of one of the world’s largest integrated gas processing complexes. The five plants of the Habshan Complex have a combined capacity to process 6.1bn standard cubic feet of gas per day. The newly awarded transmission pipelines will connect the Habshan Complex with the Ruwais LNG facility.

A contract valued at US$1.24bn for the LPP, was awarded to a consortium consisting of Engineering for the Petroleum and Process Industries (ENPPI) and Petrojet. A US$514mn contract for transmission pipelines was awarded to the China Petroleum Pipeline Engineering Company, while Petrofac Emirates LLC scooped a US$335mn contract to develop the new compression facilities. The third EPC contract awarded to Petrofac at the Habshan Complex, this includes the EPC of two gas compressor trains, associated utilities and power systems.

Fatema Al Nuaimi, Chief Executive Officer of ADNOC Gas, said, “These contract awards reaffirm ADNOC Gas’ commitment to delivering sustainable growth and maximising shareholder value. We are investing in world-class infrastructure and innovative technologies as we expand our capacity in LNG liquefaction and strengthen our position as a global player.”

ADNOC Gas is developing the Ruwais LNG project on behalf of ADNOC. When fully operational, the Ruwais LNG plant will more than double ADNOC Gas’ current LNG production capacity to more than 15 million tonnes per annum (mtpa). The export facility will feature two liquefaction trains, each with a processing capacity of 4.8 mtpa, powered by clean grid electricity.

Upon completion, Ruwais LNG will be one of the lowest-carbon intensity LNG plants in the world, utilising artificial intelligence and other advanced digital technologies to enhance safety, minimise emissions and drive efficiency. The project is set to advance ADNOC’s LNG leadership ambitions, with more than 7MTPA of its production capacity already committed to international customers under long-term agreements, as well as furthering its energy transition objectives.

Average global leading-edge dayrates. (Image source: Westwood RigLogix)

A slowdown in global rig demand, a pickup in rig attrition, and falling dayrates are predicted for 2025, according to new research from Westwood Energy

2024 was another strong year for the offshore drilling rig market with high utilisation and dayrates, but 2025 is likely to be a year of declining demand and dayrates – as part of a market correction in a continued upcycle rather than the beginning of another downturn, the energy consultancy says. The three main rig types – jackups, semisubs and drillships – are already experiencing weakening demand and declining dayrates. Inflationary pressures across the sector are the driving force of the market correction expected in 2025. Rising projects costs are one of the main contributing factors, along with delays caused by supply chain challenges, resulting in long lead-times for parts and equipment. Offshore rig demand is expected to grow in areas such as Latin America, Africa and India, while demand remains depressed in the North Sea and the US Gulf of Mexico shallow-water shelf. South America will continue to lead global floating rig demand, and the Middle East will remain the dominant driver of jackup demand, according to Westwood.

Decline in offshore rig demand

The drop in offshore rig demand will lead to an increase in rig attrition, particularly in the semisub segment. Rig contractors will focus cuts on units least likely to be in demand. Consolidation among rig contractors should also provide the opportunity to streamline fleets and retire any units unlikely to be used.

As bidding becomes more competitive, dayrates are increasingly under pressure. More incentives could be offered, such as lower mobilisation fees and discounted minor upgrades. Inflation, leading to higher labour, service and parts costs, means rig contractors will not be able to discount their dayrates as much as before. Meanwhile, dayrates for the highest-capability units will continue to command the highest rates, as these units also face the least availability in the near-to-medium term.

“The aforementioned attrition and Westwood’s expectation for few deliveries next year will tighten the available rig supply even further,” said Cinnamon Edralin, Americas Research Director at Westwood Energy. “Once operators begin to jump on the lower dayrate offers, thereby reducing near-term availability, then dayrates will bottom out and start to rise once again. With drilling demand generally being pushed into 2026-27 instead of cancelled, this sets the stage for 2025 to be a year of declining demand and dayrates as part of a market correction in a continued upcycle rather than the beginning of another downturn.”

The contract is for pipeline installation, shore approach works and dredging for the Tung-Hsiao Power Plant 2nd Stage Renewal Project. (Image source: NMDC Energy)

NMDC Energy is expanding its presence in the Asian market with the award of a US$1.136bn EPC contract by Taiwan Power Company (Taipower) for the Tung-Hsiao Power Plant 2nd Stage Renewable Project

Valued at US$1.136bn, the project involves the design, construction and installation of 111 km of linear subsea pipeline at depths ranging from 10 metres to 55 metres, stretching between Taichung and Tung-Hsiao on Taiwan's west coast. The contract involves shore approach works and dredging operations volume of around 6mn cubic metres. The work will be led by NMDC Energy, utilising the capabilities of NMDC Dredging & Marine.

As part of its commitment to expanding into high-growth regions and becoming a global leader in ten energy and marine engineering sectors, NMDC Energy is keen to strengthen its presence in Taiwan, which it sees as a strategic market with significant potential, and where it is already progressing renewable energy initiatives. By leveraging its multidisciplinary expertise and forging partnerships in the region, NMDC Energy is looking to explore new opportunities for sustainable growth.

Landmark contract

Eng. Yasser Zaghloul, CEO of NMDC Group said, “This landmark contract underscores NMDC Energy’s position as a global leader in engineering and marine solutions, while driving forward Taiwan’s energy transition ambitions. Our work in Taiwan is not merely about infrastructure; it represents a commitment to creating sustainable pathways for energy resilience in a region of strategic importance. This award reaffirms our dedication to delivering world-class expertise across diverse geographies and demonstrates how NMDC Group’s integrated capabilities set the benchmark for transformative, high-impact projects worldwide.”

Eng. Ahmed Salem Al Dhaheri, CEO of NMDC Energy, added, “Over the past three years, we have boldly expanded our operations into renewable energy in Taiwan, forging transformative partnerships to unlock opportunities for various clean energy integration. Our collaboration with the Taiwan Power Company will drive and strengthen our presence in Taiwan and South East Asia.”

The award highlights NMDC’s expertise in delivering complex energy EPC and marine engineering projects while reinforcing its strategy to expand its operations geographically into high-potential markets. It is expected to significantly boost revenue while strenghthening NMDC’s leadership in sustainable energy solutions.

NMDC is currently experiencing strong growth and global expansion after rebranding and restructuring its operations. In September 2024, NMDC Energy was listed on the Abu Dhabi Stock Exchange, following the launch of its IPO which was 31.3 times oversubscribed, generating AED 3.22bn (US$880mn) for the Group. For the nine-month period ending 30 September 2024, the Group reported an impressive 68% growth in revenues and a 45% surge in net profits compared to the same period last year.

The strong performance for this period was underpinned by a healthy project pipeline, strategic operational expansion across the Group’s divisions, as well as NMDC Energy’s successful Initial Public Offering (IPO), according to the company.