Active jack-up rigs in Middle East expected to double driven by Saudi demand

Speaking at the Saudi Maritime Congress, McDonald stated, “It is predicted that demand for hydrocarbons is likely to grow by approximately 2 million barrels per day to reach a total of 102 million barrels a day over the next few years.”

Hydrocarbon demand in turn increases exploration and production and he said the market was showing positive signs of sustainability and growth. Operators are locking in rigs longer periods and day rates are increasing.

“Looking geographically, we are expecting the regions with the most activity to be here in the Middle East, also in the Gulf of Mexico, West Africa, and South America,” he said.

The active jack-up rig count in the Middle East is estimated to double over the next two years driven by growth and investment from Saudi Arabian operators.

“Similarly, we envision strong future demand for FPSOs with 40% global fleet growth over the next eight to 10 years underpinned by global demand for energy, a robust oil price and now, energy security concerns,” McDonald said.

There are more than 100 FPSOs in their planning stages, which would probably translate into final investment in over 50 FPSOs.

The Middle East is at the forefront of greenfield capital expenditure which is expected to surpass $100 billion this year and into 2024. This is principally driven by the Middle East with the area's offshore spending growth set to continue at least for the next three years, growing from $33 billion this year to $41 billion in 2025. With the Saudi operators sitting at the forefront of all of this,” he stated.

Related:Middle East offshore vessels on the cusp of a ‘super-cycle’

What ABS sees as different with this industry boom is a commitment to grow sustainably.

“By way of example, ABS has just developed at awarded the world's first formal sustainability notation on an FPSO and this is becoming increasingly business as usual,” McDonald said.

He said that Saudi operators had pioneered support of the sustainability notation. The first in the region was a gas-ready VLCC built for Bahri by IMI and Hyundai Heavy Industries. “This notation reflects Bahri’s, IMI’s, and ABS’ has commitment to the environmental protection elements of the Kingdom of Saudi Arabia's 2030 vision.”

Meanwhile Saudi Aramco has achieved the Enviro notation for key vessels and is working with ABS to extending the recognition to its entire fleet. “The Enviro notation is a symbol of compliance with international environmental protection requirements, and reflects Aramco is willingness to go above and beyond just mere compliance,” McDonald stated.