Industry

The Middle East is home to many ageing oil and gas facilities. (Image source: ASCO)

With decommissioning still at an early stage in the Middle East, getting the model right now will reduce risk, protect schedules and build the local skills, infrastructure and supply chains needed for future projects, says Lee Vettese, regional manager – Middle East at ASCO

The Middle East has spent decades building energy infrastructure at exceptional scale. Decommissioning will test a different part of that system, with requirements that extend well beyond offshore removal.

Meeting those requirements is not simply about having contractors available when projects move into execution. It is about building the physical capacity, regulatory frameworks, specialist skills and operating models needed to manage decommissioning safely and efficiently.

Much of the technical debate centres on wells, structures and removal methodology. But the success of a decommissioning programme is also shaped by what happens once material reaches shore.

Closing the infrastructure gap

The quayside and laydown space needed to receive, process and store decommissioning material is often there. What is missing is the investment and technical preparation needed to turn that space into something that meets the sector’s requirements. That includes segregation areas, licensed waste-handling capability, contamination controls and established routes for reuse, recycling, treatment and disposal.

A single project can bring ashore multiple material streams, including steel recovered from equipment, topsides, jackets and tubulars, alongside residual hydrocarbons, produced water, hazardous coatings and NORM-contaminated material. Managing that mix involves assessment, classification, decontamination, heavy lifting, dismantling, segregation and specialist treatment.

Bringing different disciplines, permits and contractors into one programme makes consistent control across the material chain essential. Without reliable traceability and clear ownership, reusable equipment can be treated as waste, while changes in classification or delays in documentation can leave material sitting in storage, create additional handling and compliance issues, and put both cost and schedule under pressure.

The practical test is whether ports and supply chains are equipped to coordinate that complexity at volume. Over the last two years alone, ASCO has managed projects involving more than 30,000 tonnes of material. Managing that volume requires coordinated quayside operations, full traceability and specialist processing. Ports without the right facilities become bottlenecks rather than solutions. If material remains in storage longer than planned, costs rise and schedules come under pressure.

If accountability is fragmented, the interfaces between them become the weak point. An integrated delivery model does not mean one company performs every task. It means there is one clear line of accountability across the onshore chain, from receipt and handling through to dismantling, material recovery and certified disposal. Specialist partners can still be brought in, but safety, schedule, compliance and delivery remain under coordinated control.

The importance of that control becomes clearest when site conditions challenge the plan. On one recent North Sea project, ASCO managed the onshore recovery and downsizing of an approximately 400-tonne subsea isolation valve. When concerns arose around protecting the quayside during cutting, ASCO’s environmental and lifting-assurance teams developed a bespoke load-spreading solution that allowed the work to continue safely. The project achieved a 99% recycling rate, with zero contamination incidents and no damage to port infrastructure.

Building a regional model

The Middle East can learn from mature decommissioning markets without repeating the same learning curve. The North Sea spent years developing port capacity, waste routes, contractor capability and regulatory practice. The region can apply those lessons earlier.

But this is not about importing another market’s model wholesale. Local regulation, geography, infrastructure and commercial priorities differ across the Middle East. The right approach will combine international delivery experience with the knowledge of regional authorities, port operators, asset owners and supply-chain partners.

Local content is central to that. Building decommissioning capability means developing practical expertise in lifting assurance, materials control, radiological supervision, environmental management, dismantling and project coordination. International specialists can support the early phases, but the long-term value comes from growing capability that remains in the region for future projects.

The strongest investment case will come from planning for programmes rather than isolated assets. Greater visibility of likely volumes, timings and material types allows ports and service providers to invest with more confidence and develop complementary regional capabilities.

Early projects will shape the region’s decommissioning model for decades. The opportunity is to create a connected, locally anchored capability that brings ports, specialist skills and supply chains together, giving clients confidence that recovered infrastructure can be managed from quayside receipt to final recovery. Getting that model right now will reduce risk, protect schedules and build the local skills, infrastructure and supply chains needed for future projects.

About the author:

Lee Vettese has more than ten years' experience working across diverse international energy markets in complex, regulated environments, with a specific focus on environmental and decommissioning operations. As regional manager – Middle East at ASCO, he is based in Qatar, where he leads the company's market development, strengthens strategic partnerships, and supports the region's evolving energy and environmental needs.

Amin H. Nasser, CEO of Aramco. (Image source: Aramco)

Aramco has recorded a sharp increase in Q2 profits thanks to elevated oil prices as a result of the Middle East crisis and its ability to bypass the Strait of Hormuz by diverting exports via the East-West pipeline

Highlights of Aramco’s Q2 /H1 results

• Aramco recorded Q2 profits of US$33.4bn compared with US$25.2bn in the first quarter of 2025, a rise of 33%. Profits for the first six months stood at US$67.2bn compared with US$52bn in the corresponding period of 2025.
• Revenues for the second quarter of 2026 were US$139. 146bn compared with US$124.496bn for the first quarter, mainly due to higher prices of refined and chemical products and crude oil, partially offset by lower volumes sold of crude oil and refined and chemical products.
• The board declared a second-quarter base dividend of US$21.9bn, payable in the third quarter.
• Oil production stood at 9.5mn bpd in the second quarter compared with 12.6mn bpd in the first quarter, reflecting the shutting in of production as a result of the closure of the Strait of Hormuz
• Capital expenditure for the first half of 2026 was US$20.175bn, an increase of 5.3% compared with 2025, mainly due to continuing development activity on major strategic gas projects to increase gas production capacity by around 80% by 2030 compared with 2021 levels, and phasing of crude oil increments related to maintaining maximum sustainable capacity (MSC) at 12mn bpd.

Resilience in the face of regional disruption

Aramco’s CEO Amin H. Nasser commented that the company’s performance has been defined by the resilience of its people and the agility of its business and operations to withstand and respond to rapidly changing market conditions.

“Despite the unprecedented supply disruption through the Strait of Hormuz, we continued to demonstrate our ability to maintain business continuity by capitalising on our diverse asset base and multi-decade planning, including strategic infrastructure such as the East-West Pipeline, storage capacity, and export terminals.

“That enabled us to sustain production and exports while advancing key projects, despite the challenging regional environment.”

Aramco was able to keep the oil flowing by redirecting around 70% of its oil through the East-West pipeline which runs from the Abqaiq oilfield in Eastern province to Yanbu on the Red Sea, maintaining exports at a maximum capacity of 7mn bpd. Aramco maximised throughput and exports from its west coast refineries and terminals to capture higher margins.

Through its operational flexibility, extensive domestic and international infrastructure, integrated supply chain capabilities and well-established business continuity plans, Aramco effectively managed regional challenges while maintaining operations.

“We have entered the second half of the year with solid financial and operating momentum with one of the strongest balance sheets in the sector, sustainable and progressive base dividend distributions, and a clear focus on our strategic growth objectives,” Nasser continued. “Even through periods of uncertainty, Aramco has stayed anchored to its long-term priorities. Our disciplined execution, combined with our lower-cost and higher-reliability operations, has supported our profitability.”

Aramco comments that the market demand for liquids remains resilient, and as oil flows improve, previously constrained demand is expected to recover, supporting stronger oil demand. Additional call for crude is expected from inventory replenishment and the filling of new commercial and strategic storages. The company is well-positioned to capture higher demand post-Strait of Hormuz opening for inventory replenishment and offsetting lost supply, it says.

Operational highlights

Oil

• Construction activities continued on the Zuluf crude oil increment, which is expected to process 600mn bpd of crude oil from the Zuluf field in 2026
• EPC activities progressed for phase two of the Dammam development project, which is expected to be onstream in 2027, adding crude oil production capacity of 50mn bpd.

Gas

• Phase one of The Jafurah gas plant maintained steady production of sales gas and condensate, while procurement and construction continued for Phase 2, including the construction of the Riyas NGL fractionation plant targeted for completion in 2027
• The Fadhili gas plant expansion construction activities continued, which is to provide an additional gas processing capacity of 1.5bscfd by 2027.

Downstream

• Aramco continued to leverage the East-West pipeline and enhance its west coast export infrastructure to increase supply flexibility, and the Yanbu export terminal was repositioned as a strategic hub for western regional shipments. Aramco continued to pursue major downstream projects.

, Oceaneering will deliver non-destructive testing, inspection services and value engineering. (image source: Oceaneering International)

Oceaneering International has announced that its Integrity Management and Digital Solutions (IMDS) segment has been awarded a five-year inspection and asset integrity services contract by a Qatar-based oil company

The contract followed a competitive tender process and reinforces Oceaneering’s role in providing integrity management services in Qatar after operating in the country for more than 20 years.

Asset integrity challenges

Operators in the Middle East face multiple asset integrity challenges due to the high pressure, high temperature environment, the presence of H2S in sour gas which can accelerate corrosion and equipment degradation, and high production demands.

Furthermore, a growing share of oil and gas infrastructure across the Gulf is operating beyond its intended design life. New research from Integrated Global Services (IGS) found that 46% of operators report up to half of their assets are running beyond design life, raising reliability concerns as regional disruption linked to the Strait of Hormuz places additional strain on facilities.

Effective asset integrity management (AIM) strategies are therefore critical for safe and reliable operations, as well as to ensure compliance.

Under the contract, Oceaneering will deliver non-destructive testing, inspection services and value engineering, utilising its established local workforce and leveraging Inform, its digital inspection software. The scope may also include deploying Vision, a data visualisation platform.

What are the benefits of digital asset management?

Digital Asset Management combines engineering intelligence and 3D visualisation to maintain asset integrity, reduce risk, and improve decision making. By centralising inspection data and adding 3D visualisation, operators can identify anomalies earlier, plan maintenance proactively, and reduce unplanned downtime with better scheduling and resource use.
Inform is a modular Integrity Data Management System (IDMS) platform that digitises inspection workflows, centralises anomaly and risk data, and transforms it into actionable insights.

While Vision is a 3D visualisation platform that creates engineering grade models of topside and subsea assets for reliable comparison, anomaly tracking, and condition assessment over time. It is delivered as a cloud only application.

Together they create a living digital twin, one connected platform that unifies every record and model for integrity management. Operators can easily locate relevant documentation, allowing faster maintenance and integrity decisions while maintaining a complete audit trail.

Leo Granato, senior vice president of IMDS, said, “This award underscores our ability to deliver reliable, digitally enabled integrity solutions that enhance production reliability and asset uptime while supporting regulatory compliance. Our established team in Qatar enables safe and consistent execution of our innovative solutions, while deepening the development of local talent.”

Kuwait Oil Company (KOC), the upstream subsidiary of Kuwait Petroleum Company (KPC), has signed a US$16bn lease-and-lease-back agreement with a consortium of international investors involving its entire domestic and export pipeline network, representing the largest foreign direct investment in Kuwait’s history

The transaction will involve the formation of a Kuwaiti-incorporated joint venture, which will lease from KOC the usage rights to all of its 13 pipelines, spanning around 320 km of Kuwait’s pipeline network. The JV will lease back to KOC the exclusive use, operational and maintenance rights in the pipeline assets for a period of 20 years and sixth months, in exchange for a volume-based tariff.

KOC and the consortium, comprising Blackstone, Brookfield and KKR, will establish the new joint venture, with KOC holding a 51% majority stake and the consortium holding the remaining 49%. KOC will continue to maintain full ownership and operational control of the pipeline network.

The JV is expected to generate upfront proceeds of US$7.85bn for KOC upon closing.

Why is the deal significant?

• It will support Kuwait Petroleum Company’s capital expenditure plans, including its target of 4mn bpd of crude oil production capacity by 2035; contracts recently reported include a contract worth KD35mn ($113mn) to Chinese group Anton Oilfield Services DMCC to deliver maintenance services for Jurassic Production Facilities (JPF) 1, 2 and 3 in North Kuwait, as KOC seeks to maintain and optimise its production facilities and strengthen operational performance.
• It supports Kuwait's broader efforts to diversify sources of capital and deepen engagement with global investors.
• As the largest foreign direct investment in Kuwait's history, it reflects the quality of KOC's asset base, the strength of KPC’s operational stewardship, and the enduring appeal of Kuwait as an investment destination.
• As one of the first major inward investments in the Gulf region since the onset of recent tensions, it reflects the confidence of global institutional investors in Kuwait and KPC despite the regional tensions. Blackstone is reported to be setting up an office in Kuwait through the Kuwait Direct Investment Promotion Authority (KDIPA) as part of a wider GCC expansion drive. Kuwait’s latest sovereign debt issuance raised US$6bn, with investor demand driving the combined orderbook to more than $14.75 billion across the three-tranche issuance.
• Beyond its immediate proceeds, the JV is intended to encourage further participation by global investors in the national economy, in line with KPC's development plan and Kuwait's long-term diversification agenda.

The transaction follows similar deals concluded by other Gulf NOCs including Aramco, which signed a lease and leaseback deal involving its Jafurah gas processing facilities with a consortium of international investors last year. Aramco closed the transaction to lease and lease back the development and usage rights to the Jafurah Field Gas Plant and the Riyas NGL Fractionation Plant to the Jafurah Midstream Gas Company (JMGC) for a period of 20 years, selling a 49% equity interest in JMGC to a consortium of international investors led by BlackRock’s Global Infrastructure Partners for US$11.1bn.

Prior to that, Aramco concluded a similar arrangement for its pipeline network in 2022, whereby a group of investors acquired a 49% stake in Aramco Gas Pipeline Company for US$15.5bn. Under this arrangement, Aramco Gas Pipelines Company receives a tariff payable by Aramco for the specified gas products that flow through the network, backed by minimum commitments on throughput. Aramco retains a 51% majority stake. As with the Kuwait deal these arrangements allow Aramco to maintain full operational control of its facilities while monetising its assets.

Shaikh Nawaf Saud Al-Sabah, Deputy Chairman and CEO of KPC, said, "Project Peregrine represents the largest foreign direct investment in Kuwait's history and a defining milestone for our country's economic development. It delivers on the commitment announced by His Highness the Prime Minister Shaikh Ahmad Abdullah Al-Ahmad Al-Sabah at the Kuwait Oil & Gas Show (KOGS) in February 2026 to attract world-class international investors into Kuwait's strategic infrastructure while preserving full national ownership and operational control.

"We are pleased to welcome Blackstone, Brookfield and KKR as long-term partners in this landmark transaction. Their investment reflects confidence in Kuwait's resilience, the quality of KPC's assets and our long-term vision for the country's energy sector.

"This transaction sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment."