OTC 2018: McDermott Exec Sees More Enthusiasm in Middle East
The outlook for oil and gas operators and technology and service providers in the Middle East is growing rosier and more competitive, an executive with McDermott International, Inc. told Rigzone.
“I think people are more bullish,” Linh Austin, McDermott’s vice president and general manager for the Middle East and Caspian regions, said on the sidelines of the 2018 Offshore Technology Conference (OTC).
Austin pointed to four Gulf region developments in particular that he said justify the more upbeat outlook:
- Saudi Aramco’s offshore Marjan oil field expansion
- Qatar Petroleum’s addition of three new liquefaction trains
- Bahrain’s recently announced offshore tight oil and gas discovery in the Khalij Al-Bahrain Basin; the government reported the find holds an estimated 80 billion barrels of oil in place
- Plans by Abu Dhabi National Oil Co. (ADNOC) to build the world’s largest integrated refinery and petrochemicals complex in Ruwais, UAE
The above list spans the oil and gas value chain – something that McDermott will soon do as well as it merges with CB&I. Combining with CB&I will give McDermott considerable footing in the downstream engineering, procurement and construction and installation (EPCI) business. On Wednesday, McDermott announced that both companies’ shareholders have approved the combination of the two companies. Once the deal concludes (expected May 10), McDermott and CB&I stockholders will own approximately 53 percent and 47 percent, respectively, of the combined company. The company will retain the McDermott name.
When McDermott and CB&I announced the $6 billion merger plan last December, McDermott President and CEO David Dickson said the transaction would “combine two highly complementary businesses” into a single onshore-offshore EPCI company. Both Dickson and CB&I President and CEO Patrick Mullen touted technology, scale and diversification as key drivers behind the deal.
Austin said that he expects to see more projects go to final investment decision as well as more timeline certainty in Middle East, adding that many of these new projects will likely be onshore and downstream. Moreover, he pointed out new market entrants are entering the region's competitive landscape as contract availability increases.
“In the next five years, onshore and downstream should be bigger than offshore” in the region, he concluded, adding that he anticipates gas and renewables projects will become more common.
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