Last year new awards had totalled $16.3 billion, which resulted in a backlog of $30.4 billion. These strong results underscore the advantages of the company

Despite the oil price crash impacting adversely the Middle East’s engineering, procurement and construction market, US-headquartered CB&I has had a busy year on the back of new contracts worth $6 billion it won in the first half of 2015 taking its project backlog to $30 billion as in July 2015.

Last year new awards had totalled $16.3 billion, which resulted in a backlog of $30.4 billion. These strong results underscore the advantages of the company’s complete supply chain solution, which its customers rely on for their major capital projects, says Bruce E Steimle, senior director, Global Marketing, CB&I.

'CB&I is currently executing 20 EPC projects in the Middle East region and we have project presence in Kuwait, Oman, Saudi Arabia, Qatar and the UAE,' he says in an interview with OGN.

Some of the major ongoing projects in the region include Orpic’s Sohar Refinery expansion, KNPC’s Kuwait Clean fuels project, Saudi Aramco’s Jazan Tanks, Gasco’s UAE Tank farm, the Pearl GTL Project, Qatar and the Sasref USLD Project, Saudi Arabia, Steimle says.

Referring to the falling oil prices, he says in the Middle East, the falling oil prices have had a direct effect on some of the investment plans of the NOCs and IOCs, specifically upstream projects. The economic viability of projects intended to be undertaken in more profitable times is now being scrutinised to determine whether margins have eroded during this downward cycle, and whether these marginal projects are better deferred for the future.

However, it is expected that certain investments will still proceed because of the long-term outlook and returns. Certain EPC contractors who do not have access to other buoyant markets such as North America may be impacted by the slow-down, he says.

Owing to the current oil price the total volume of oil and gas EPC work in the Middle East is expected to decline. The larger/mega upstream projects associated with new field developments will be scrutinised by owners. Gas-related projects and power projects are expected to continue due to the ongoing increased demand.

On the major risks and challenges EPC service providers over the next few years, he says the larger projects for which investments and planning have been established for long-term realisation will continue to move forward. Challenges for EPC contractors operating in the Middle East include providing high quality, safe plants while remaining competitive and managing the supply chain and risks.

'CB&I is committed to building long-term relationship with suppliers based on quality performance, high value goods and services and consequently this ensures excellence in procurement in CB&I,' Steimle says.

In regards to procurement, CB&I works out of three regions: the Americas with a main office in Houston; EME and India with a main office in The Hague; and APA with a main office in Singapore. Each region has a leadership team consisting of a sourcing and expediting manager, inspection manager, logistics manager, materials management and system and tools manager.

Suppliers are managed within these regions. The activities consist of qualifying suppliers, maintaining supplier profiles, and managing and reviewing suppliers’ performance during project execution. There are many suppliers and fabricators in the Middle East which will need to reach out to other markets to overcome the expected reduction in workload.

On the talent availability across the areas of sales, project management, engineering, procurement and construction, he says in the Middle East, with the expected downturn in the total volume of oil and gas projects, it is envisaged that there will be increased availability of personnel in the engineering and pro-curement disciplines.

In addition, construction resources will not be as stretched as they have been in recent years, which should result in more consistent quality of construction and better project on-time completion, he says.

CB&I has been present in the Middle East since the discovery of oil in early 1930s. The company contracted its first project for Saudi Aramco in 1938 and have been continuously present in the region since then.