As demand for oil and gas resurges after a post-pandemic slump, the Middle East now faces new challenges to get offshore projects off the ground in time, GAC's Gopalakrishnan Srinivasan tells OGN

With countries worldwide aspiring to secure robust, self-sufficient domestic power, and less reliance on third parties and imports, the development of renewable infrastructure to ensure local energy security is moving forward rapidly.

But developing the necessary sustainable infrastructure will not happen overnight. It takes significant time and investment from all involved, including energy providers, local governments and project managers.

Meanwhile, demand for oil and gas to ensure short-term energy supply has seen renewed growth as global instability delivers price and supply shocks that test the public’s need for affordable power against their desire for clean energy.

According to the International Energy Agency (IEA), demand for fossil fuels is set to climb in the coming years before peaking in 2030.

According to the agency’s March 2024 Oil Market Report, global oil supply for 2024 is forecast to rise by 0.8 million barrels to reach a new high of 102.9 million barrels, fueled by record outputs from Brazil, Canada, Guyana and the US.

Meanwhile, as highlighted in the Opec 2023 World Oil Outlook, global oil demand is set to reach 116 million barrels per day by 2045, up from 101 million recorded in 2023.

Opec estimates that it will take more than $14 trillion of capital and a significant push in related infrastructure projects to meet expected demand.

OIL AND GAS MAKING A COMEBACK

The anticipated surge in oil and gas projects in the coming years is a sharp contrast to what the sector experienced during the pandemic.

GAC undertakes telescopic joint movement by air

When Covid-19 slammed the brakes on global travel, oil demand nosedived by almost a third, and countless offshore rigs went into cold or warm stacking hibernation - a critical cost-cutting measure in the face of a stark reminder of the sector’s vulnerability.

Such stacking is now a thing of the past as drilling companies play catch-up in the renewed push for offshore oil and gas projects, leading to a critical shortage of available rigs.

Gopalakrishnan Srinivasan, GAC Group’s General Manager for Special Projects – Energy, says the trend started picking up pace as pandemic-related restrictions were lifted and now availability is one of the main challenges the industry faces.

"Oil prices soared in the aftermath of the pandemic, fueling renewed industry optimism and a surge in drilling opportunities," he adds.

"But that created a ripple effect - a critical shortage of rigs and added security threats in Red Sea, sent operational costs sky high, which create a chain reaction impacting the entire energy sector."

Concerns about global energy security are driving an unprecedented boom in installations and operations. Cold or warm stacked rigs are now a relic of the pandemic.

"Every platform, vessel and crew that was laid up are back in action. It is truly full steam ahead for the oil and gas sector. Ship owners are spoilt for choice, and can cherry-pick the most lucrative projects," Srinivasan says.

MIDDLE EAST REVIVAL

The revival of offshore oil and gas projects has fueled increased demand for shipping, logistics and marine energy services, particularly in the Middle East, to support and ensure smooth running of complex drilling operations.

Storage of buoyancy modules ... GAC has supported several major projects in the

For more than 60 years, GAC has supported the region’s oil and gas sector with rig moves, project logistics, end-to-end supply chain and purchase order management, warehousing facilities, handling of spares and more.

That includes several major projects for the rejuvenated Middle East energy sector.

Off the coast of Qatar, GAC supported the development of the North Field Expansion project, including the installation of jackets, topsides and more than 550 km of underwater pipe laying to produce more than 1.4 million bpd by 2025.

GAC Qatar is the official agent for almost a dozen rigs at the Al Shaheen Oil Field and is now the leading ship agent for LNG vessels calling at Qatar as export numbers continue to rise.

The company is also supporting a $20 million pipelaying project in Abu Dhabi in the United Arab Emirates.

Meanwhile, in Saudi Arabia, GAC acted as the official service provider for Sleipnir, the world’s largest semi-submersible crane vessel used at a number of offshore oil and gas projects, including the Marjan Oil and Gas Field, which is undergoing a major expansion project to boost its production capacity to 800,000 bpd.

COMPLEXITY

Third-party service players like GAC are being called upon more, particularly as the size, scale and complexity of offshore oil and gas infrastructure projects continue to grow.

"Ensuring that all the right parts are in the right place at the right time, handled by qualified GAC staff is a 24-hour operation," says Srinivasan.

Offshore players are turning to tried and trusted partners with the necessary infrastructure, resources and expertise to provide heavy-lift support, logistics and crew services, and strategically located onshore port and yard space for their projects.

"The complexity involved in an offshore oil and gas project can be easily overlooked. Moving 100 km of pipes for a project involves much more involved than ‘just moving pipes’. There are also the intricacies of loading and unloading vessels, storage, truck loading and final delivery – all in line with local regulations that can differ from one location to another," says Srinivasan.

As the Middle East witnesses a major push for offshore oil and gas projects to come online in the short term, getting the right infrastructure up and running is vital.

But getting these such large-scale projects off the ground - and keeping them running smoothly – is a complex puzzle that will require all of the pieces, including a dedicated support network of service providers, to fit into place.

By Abdulaziz Khattak