EIC Voices Cautious Optimism for Middle East Project Sector

By Dennis Daniel

Over the last 12 months, some 140 projects have been announced across the Middle East, spanning oil and gas, mature renewables, energy transition, conventional power and large-scale nuclear energy production.

While oil and gas continues to dominate the share of total projects, there has been a significant rise in energy transition and renewable energy projects, particularly solar, onshore wind and carbon capture projects.

“The energy industry is at a pivotal point, being reshaped by geopolitical shifts, supply chain disruption, and sustainability imperatives,” said Ryan McPherson, regional director at the Energy Industries Council (EIC), during a MENA project briefing at Breakbulk Middle East.

According to McPherson, energy transition offers new opportunities, as the current project pipeline falls short of meeting ambitious renewable energy targets. While solar dominates the renewable energy market, wind energy – particularly onshore wind – is gaining traction due to its compatibility with the region’s climatic conditions.

“The Middle East is demonstrating a strong commitment to wind energy, with numerous companies increasing investments in wind projects as part of their broader strategy to diversify energy sources. Several wind energy projects were announced in the region during 2023 and 2024, primarily focusing on onshore projects. However, there’s a potential for expansion into offshore wind projects in the future,” McPherson said.

The executive, though, warned that compared to the total number and values of projects, the percentage of projects reaching financial investment decision (FID) remained low.

“We’re seeing a lot of projects being announced and then not reaching their FID stages. This is a concerning trend, because FID is a critical stage in the delivery of projects and an indicator of project success. As an industry, we must not shy away from discussing the FID rates of projects,” he said.

Other industry challenges highlighted by McPherson included sustaining the growth in business that has occurred over the last year and driving exports.

“While many companies in the region experienced record growth in 2024, it’ll be interesting to see how they sustain that momentum in 2025. New exports remain a challenge, which may lead to a slight slowdown,” McPherson said.

“It’s clear that companies will need to adapt themselves to new market situations and become resilient to meet challenges for the year ahead, and perhaps beyond. Empirical data is valuable, but it’s equally important to align it with the actions and strategies of customers. I hope the insights will start new discussions and influence decision-making processes.”

The session was sponsored by Red Sea Gateway Terminal.