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Making the connection: Upstream energy cable focusby Arabian Oil & Gas Staff on Jan 10, 2013
Leading cable companies reveal the trends expected to shape O&G demand in 2013 and beyond
The global financial meltdown and subsequent economic slowdown over the past few years has prompted some valid concerns over the short-term viability of the cable industry in the Middle East region.
But a lean few years could be giving way to tangible spread of confidence in the market once more, as projects that had been stalled or shelved begin to roll-out.
Make no mistake, the plethora of large-scale upstream oil and gas projects represent a massive opportunity for cable manufacturers. The sheer demand for power to offshore production facilities since 2000 was the key reason for the rise in cable consumption in the last decade, and remains a multi-million dollar sector.
However, a tightening in investment, rising commodity prices, and an increased number of firms vying for the same contracts means it is a more competitive sector than ever before. Standing out from a packed market is the key to future success and survival.
Something that Mike Smith, vice-president sales at MacLean manufacturing group (including Noskab) explained: “Not content in only trying to supply what is being requested, Noskab are continually offering the best solution - whether technically or commercially - by being aware of new developments in cable technology, which sometimes bring distinct advantages over some traditional cables.
A good example of this was the introduction of a more flexible marine cable, which improves on time and installation in areas of oil and gas offshore facilities.
Cables quite often are one of the last products to be ordered within a project and Noskab with their vast capabilities to source around the world can not only offer key quality cables but also with reduced lead times,” he said.
Sherif Maher, UAE general manager of Elsewedy Cables highlights a general upturn in demand in the region, with around $50 million of business in 2012 allied to the upstream energy industry, and a notable increase from the sector compared to 2011.
Elsewedy clients include numerous electricity authorities such as ADWEA, SEWA, DEWA and FEWA as well as oil & gas companies such as ADNOC companies, Adco, Zadco, Gasco, Takrir, Adma and Opco.
However, for the UAE market, trading sales have been ‘dramatically decreased in 2012’ due to the lack of demand and the project status. Turnover for trading activities in 2012 decreased by 55% at $30 million against $65 million in 2011.
Despite struggles this year, the company claims to have an annual growth rate in the region of 18%, and still identifies the UAE as a leading market. “The UAE is leading our cargo in terms of availability, transit time and prices.
Yes, we expect a slight increase in the UAE market and our vision might change upon the award of Expo 2012, while we are expecting a huge increase in the Saudi Arabian market in the coming years,” said Maher.
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