News

HFI was delighted to be represented by Hugh Fraser on the EIC (Energy Industries Council) panel session at ADIPEC Exhibition and Conference 2023 on Thursday afternoon, covering the theme of projects delays, challenges and potential solutions.

It is clear the supply chain needs a flood of working capital if it has any prospect of staying in good financial and operational health to rise to the Everest-scale boom of projects coming over the hill – US$660 billion energy projects tracked in the GCC by the EIC and US$730 billion upstream petroleum projects tracked by Rystad Energy in the MENA region through to 2030.

The NOCs are awash with profits and cash at the moment and the time has come to invest in the supply chain on a win/win basis and to break-out of 2014-2019 era mindsets: bureaucratic procurement systems, rigid fixed lump-sum low-to-no margin pricing, penal risk-awash contract terms, cash-imprisoning performance bonds, payment delays and scoping/variation order wars are all self-defeating. This has to be moved out into a more collaborative approach and the focus must be on project self-financing of the supply chain’s involvement.

Within the SME contracting and supply chain community, clustering with peer group players and joint ventures with well-placed local partners must be the order of the day, if the resource pressures and localisation challenges are going to be overcome.  

The panel session coincided with the announcement of a US$4.1 billion contract award by ADNOC Group to Saipem, which follows on from massive contracts awards for Saipem in Qatar and Saudi, under-scoring the scale of what is happening in the region.

The panel was moderated by Ryan McPherson, EIC Regional Director, and also featured Julian Haslam-Jones,  Dermot Clarke, and Lee Bailey.

My thanks to the attendees who gave up their time to hear the panel, and to the clients and connections we met during Day 4.