MRC Global October 2017 InSight

Caspian & Middle East

In the Caspian region, customer activity has increased substantially in recent months, and MRC Global has experienced a strong growth in both orders and enquiries.

In Kazakhstan, the $30 billion TCO/Chevron Future Growth Project is driving significant demand for manufacturers with many long lead time orders already in production. The project will start relocating personnel from the KPJV UK offices to Atyrau and Tengiz in Q4 2017. 22,000 more workers are expected to be needed in Kazakhstan when the project construction reaches its peak.

The volume created by the Future Growth Project has placed a burden on specific manufacturers and subsequently impacted lead times, whereas the balance of manufacturers have available capacity. Pricing remains competitive overall and the market continues to look for cost reductions to offset low oil prices.

Although the Azerbaijan market is slow, there are signs of increasing project activity moving forward with major customers confirming projects for the next five years. In the Middle East, we have experienced a slight slowdown in activities. The low oil price has finally had an impact on this large and robust market as OPEC has reduced production in line with global agreements.

In the Kingdom of Saudi Arabia, the Q1 2017 statistics showed that the oil sector had diminished 2.3% year-over-year. This represents the largest decrease since 2013. Project activity in the execution phase remains strong, but current FEED work might not progress to FID due to the downturn and low oil price.

In the Middle East region, the upstream sector exhibited a modest increase overall. There are growing prospects in Iraq where many integrated oil companies (IOCs) are increasing their activities. In the United Arab Emirates and Oman, there is an increase in the number of rigs, coupled with an increase in offshore operations in Qatar. Considerable investments are underway to increase storage capacity, particularly in the region of Fujairah. In Qatar, the supply chain has been impacted by a trade embargo imposed by the kingdom of Saudi Arabia and the United Arab Emirates.


...(PVF) distributors like MRC Global are seen as supply chain partners with the ability to manage costs while maintaining high quality specifications and more complex environmental, health and safety requirements.


The downstream and midstream sectors are flat. The chemical and refining market is significant and MRO demands are strong, while project activity is slow. Increases in the capacity and performance of existing gas and LNG plants will facilitate the rapid development of the region. Pipe, valve and fitting (PVF) distributors like MRC Global are seen as supply chain partners with the ability to manage costs while maintaining high quality specifications and more complex environmental, health and safety requirements.