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, says GlobalData, a data and analytics company.
The oil and gas industry recorded contract value of USD 31.96 billion in Q2 2020, as compared USD 18.01 billion reported in the previous quarter. GlobalData highlights that the number of contracts witnessed a decline from 1,267 in Q1 2020 to 907 in Q2 2020.
GlobalData’s latest report, “Q2 2020 Global Oil & Gas Industry Contracts Review”, states that the upstream sector reported 658 contracts in Q2 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 USD 19.21 billion agreement with DSME, Hyundai and Daewoo for the construction of more than 100 LNG carriers, as well as the USD 2.85 billion contract with Hudong-Zhonghua Shipbuilding for the construction of 16 LNG carriers and Maire Tecnimont led consortium with Sinopec Engineering’s USD 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 & Gas Analyst at GlobalData, says, “Europe recorded the majority of the contracts, with 412 contracts in Q2 2020, 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% 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%,” continues Kad.