According to the Rystad Energy analysis, pre-COVID-19 estimates placed the total value of tenders in 2020 at $132.8 billion. However, due to the impact of the virus, contractors are now bracing for cut-throat competition as new contracts will be few and far between.
“Around $60 billion in engineering, procurement, construction and installation (EPCI) awards originally scheduled to be awarded this year – including $25 billion in equipment and $30 billion in other fabrication jobs – have been postponed,” the analysis stated.
The analysis also outlined that $170 billion worth of tenders were offered in 2019, with 2021 expected to show only marginal recovery on the 2020 forecast at $74 billion.
Rystad Energy oil field services analyst Chinmayi Teggi said that contracts that had already been awarded were at risk of being terminated due to operators reaching out to contractors to reduce prices.
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