Project awards in Oman up 92% to $960mn in Q1

Muscat – Total value of projects awarded in Oman during the first quarter of 2023 reached US$960mn, up by nearly 92 per cent compared to US$501mn worth of projects awarded in the first quarter of last year, according to a research report released on Wednesday.

GCC project awards expanded during the first quarter despite global economic challenges such as the global banking sector turmoil, higher inflation, and the ongoing Ukraine-Russia conflict, Kuwait-based Kamco Investment said in its GCC Projects Market Update report.

With regards to the new planned projects in Oman, the report said that the sultanate currently has approximately US$7.8bn worth of contracts in the tendering or bid evaluation stage.

Total value of contracts awarded in the six GCC countries increased by 55 per cent year-on-year during the first quarter of 2023 to US$29.9bn as compared to US$19.3bn during the same period of 2022. This was the second highest quarterly project awards since the start of 2022, the report noted.

All GCC project markets witnessed year-on-year project awards growth during the first quarter of 2023 except for Bahrain which remains the smallest project market in the region. Saudi Arabia remained the largest projects market in the GCC during the first quarter of this year. Saudi Arabia’s project awards recorded 17.9 per cent growth during the quarter to reach US$13.3bn as compared with US$11.3bn in the same period a year ago.

Saudi Arabia alone accounted over 44.6 per cent of the contracts awarded in the GCC region during the first quarter, while Saudi Arabia, UAE and Qatar combined represented 84.1 per cent of the overall projects in the GCC.

The UAE project awards more than doubled to reach US$10bn during the first quarter while Kuwait’s contract awards reached US$1.8bn this year as compared with US$407mn in the corresponding period of 2022 recording the highest percentage year-on-year contract awards increase in the region.

In terms of sector classification, the chemicals sector witnessed the biggest increase in the value of projects awarded during the year recording US$4.7bn year-on-year increase in new contract awards to reach a total of US$5.7bn during the first quarter of 2023.

As per the report, the growth in the GCC project awards during the first quarter has been partly fuelled by the determination of the GCC countries to diversify their economies away from hydrocarbons. GCC member states have backed and invested in projects in the industrial sector such as aluminum, steel, and other industrial equipment manufacturing projects.

GCC project pipeline

Citing estimates from MEED Projects, Kamco Investment said GCC projects could reach an aggregate of US$110bn in 2023 sustained by elevated oil prices and high energy demand around the world. It said all GCC countries are expected to see growth in contract awards with the possible exception of Qatar which may see dip in contract awards during the year.

In terms of sectors, GCC region’s construction sector is expected to take the lion’s share (58 per cent) of project awards in the region during 2023. New project awards in the water, petrochemical and power sectors are also expected to perform very well during the year.