Oil and gas contract activity remained subdued in 2020, with the industry recording a decrease in the number of contracts and disclosed contract value, according to data and analytics company, Globaldata.

GlobalData’s latest report, ‘Annual Global Oil & Gas Industry Contracts Review’, outlines that the number of oil and gas contracts fell from 6,971 in 2019, with a value of $151.06 billion, to 5,014 in 2020, totalling $94.29 billion.

Pritam Kad, Oil and Gas Analyst at GlobalData, explained that the significant drop in contracts and contract value was primarily attributed to industry slowdown following a steep decline in crude oil prices, as well as the effects of the COVID-19 pandemic and lockdowns in 2020.

“These further led to reduction in capital expenditure from many producing companies and increased project cost with deferred timelines,” Kad said.

In terms of scope, a total 51 per cent of those recorded in 2020 were operation and maintenance (O&M) contracts, followed by ‘procurement’ contracts, which accounted for 17 per cent.

The majority of contracts were recorded during Q1 2020 (the pre-COVID-19 quarter), with 1,441, and Q2 2020 contributed the most on the disclosed value front with $34 billion during the year.

“The last quarter of 2020 was a sigh of relief with relatively stable contract activity, as lockdowns were lifted or eased in many countries, and businesses tried to adapt to the new normal,” Kad said.

“The marginal improvement seen in commodity prices is giving space for Capex improvement in the upstream industry with an eye for effective future outlook.”