MENA Offshore Market Update for Subsea UK Members in May

The scale of opportunities for the subsea sector in the Middle East and North Africa (MENA) region will come under the microscope at an event being hosted by Subsea UK and HFI Consulting International next month.

A lunch and learn event on Tuesday, 22 May will put the focus on offshore and subsea growth potential in a region which has seen a significant increase in exploration and production activities in recent years.

The gulf region has traditionally been recognised as an onshore and shallow water market but the sheer scale of offshore activities off the east coast of Saudi and the huge gas discoveries by the likes of ENI and BP in the East Mediterranean have called for a re-focus by subsea specialists.

Moving forward, the Red Sea may offer another major deepwater opportunity and the East India and East Africa deepwater markets are within shooting distance of MENA base camps.

During the lunch and learn, which will be staged in Aberdeen, HFI will lay out its unique bridgehead cluster venture (BCV) approach designed to help subsea companies penetrate this fast-growing market.

The cluster project will bring together an optimal five synergistic companies, all operating within the subsea sector, to work together in tandem to launch a joint venture in Saudia Arabia – a territory which over the years has been notoriously difficult to crack.

A separate cluster of five firms with operations focused on advanced drilling and well management is also being set up. It will be spearheaded by HFI consultant Graham Berry, while the subsea cluster will be led by Adrian Phillips.

Adrian said: “We are pleased that Subsea UK has invited us to host this lunch and learn event, to share details about how the cluster concept will work and what the benefits to partners will be.

“When we first looked at developing this project in 2017, we initially felt that there would be one cluster focused on ADWM, but as time progressed the need for a similar cluster focused on subsea became apparent.

“We have seen an increase in the number of companies focusing activity on the Arabian Gulf which, with depths rarely reaching above 100m, is one of the world’s shallowest seas.

“This is certainly not an onerous environment for subsea operators more used to the North Sea, but establishing themselves in this region will place them in a very strong position to respond to the developing opportunities within the Red Sea and the wider emerging regional deepwater markets.

“We already know that there are a number of oil and gas fields present in the Red Sea, and ongoing surveys are showing positive results. It all adds up to huge potential for North Sea subsea firms to share many decades of knowledge, technology and proven track record with the Saudis.

“If anyone is in doubt about this, they just need to look at recent LTA awards in Saudi Arabia. Totaling US$6bn, these have been awarded to a range of international installation contractors including Dynamic, McDermott, Saipem, Subsea7 and NPCC.”



HFI Consulting International is a Subsea UK Member


This was further clarified to Adrian at a Department for International Trade event in London earlier this week. The event was set up as an opportunity for Saudi Aramco to discuss the opportunities that exist for the UK supply chain, and during the course of one afternoon, its representatives held 168 one-to-one sessions with UK SMEs, many subsea-focused.

Aramco gave detailed information about the importance of Saudi Arabia’s transformational In-Kingdom Total Value Add and the scale of new projects that will be coming on-stream in the short, medium and long-term.

Among them are the creation of the King Salman International Complex for Maritime and Industries and Services – a USD$5.8bn investment to create a manufacturing and services hub for offshore rigs and commercial and offshore service vessels that will create 80,000 jobs.

Aramco also described its current focus on offshore drilling rigs which, with a USD$6.4bn investment, will create 5,000 jobs. Overall, it has a 10-year capital programme worth USD$414bn – including a USD$134bn spend on drilling and well services.

The scope of opportunity for subsea operators led to HFI formally launching its consultation on the KSA cluster collaboration project at Subsea Expo in Aberdeen in February. That consultation is still ongoing and, should market testing prove to offer a solid platform for the five companies involved in the cluster, the venture should launch in the autumn.

The cluster approach will lead to a general manager being appointed to steer the venture through the bridgehead period, setting up all the necessary legal and vendor registrations, identifying a local partner, and undertaking the business development function.

All companies involved in the cluster will have an equal share of the start-up costs, which will be significantly less than were they to go it alone. The collaboration concept also accelerates time to market, which is known to be a critical success factor for new businesses in the region.

Adrian added: “We know that the UK subsea sector has some of the best technology and know-how in the world, and if ventures fail to succeed in Saudi Arabia, then it is unlikely to be related to the quality of the product or service.

“We believe that HFI’s track record and in-depth knowledge of this challenging region will make the difference between success and failure. We very much look forward to sharing further information with Subsea UK members.”