The global oil and gas industry has witnessed a continual slowdown in the number of oil and gas contracts, as companies are finding it difficult to proceed further due to stressed capital, crude oil prices decline and operational challenges due to the COVID-19 outbreak, according to GlobalData.
The oil and gas industry recorded contract value of US$31.96 billion in the second quarter of 2020, compared to US$18.01 billion reported in the previous quarter. GlobalData highlights that the number of contracts witnessed a decline from 1,267 in the first quarter of 2020 to 907 in the second quarter.
The company’s latest report, Q2 2020 Global Oil & Gas Industry Contracts Review, states that the upstream sector reported 658 contracts in the second quarter of 2020, followed by midstream and downstream/petrochemical sector with 171 and 114 contracts, respectively, during the quarter.
During this time, some of the key contracts signed were Qatar Petroleum’s US$19.21 billion agreement with DSME, Hyundai and Daewoo for the construction of more than 100 liquified natural gas (LNG) carriers, as well as the US$2.85 billion contract with Hudong-Zhonghua Shipbuilding for the construction of 16 LNG carriers and Maire Tecnimont led consortium with Sinopec Engineering’s US$1.31 billion contract from Amur GCC for the Engineering, Procurement and Site Services (EPSS) including the implementation of several large-scale polyolefin units in Russia.
Pritam Kad, Oil and Gas Analyst at GlobalData, detailed that Europe recorded the majority of the contracts, with 412 contracts in the second quarter, followed by North America, which has taken a deep dive and reported only 184 contracts during the quarter.
“Operation and Maintenance (O&M) represented 52 per cent of the total contracts in Q2 2020, followed by contracts with multiple scopes, such as construction, design and engineering, installation, O&M, and procurement, which accounted for 15 per cent,” Kad said.