Capital expenditure on oil and gas developments is expected to fall 23% this year, with the majority of contractors expected to bid low amid deflationary pressures and a growing urgency to arrest a decline in order backlogs.
Despite a September quarter increase of 21.3% and two consecutive quarters of growth in new orders, contractors continue to struggle to replenish backlog levels, an ODS-Petrodata analyst said.
New orders this year are expected to be around 70% of last year’s as international oil companies hold back on project sanctions after a drastic plunge in commodity prices in the second half of 2008.
Only a handful of contractors surveyed including Hyundai Heavy Industries, Aker Solutions Subsea, JGC, Technip, Acergy and Subsea 7, are beneficiaries of large but fewer contracts awarded over the last two quarters.
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