The three hydrocarbons-rich Caspian Sea states of Azerbaijan, Kazakhstan and Turkmenistan offer an increasingly attractive proposition to companies affected by the slowdown in oil and gas projects activity project in the GCC, according to new data released by Meed Projects.
There are more than $165 billion (Dh606 billion) worth of active energy and infrastructure schemes in the three nations according to Meed Projects.
The largest of the three is Kazakhstan, with a total of $69 billion of active projects, followed by Azerbaijan at $60 billion and Turkmenistan with $37 billion.
From a sector perspective, gas is the single-largest projects market in the three countries, with $39 billion worth of project opportunities, followed by oil at $32 billion and then transport at $26.7 billion.
"As we all know, the projects market in the GCC has been in steep decline of more than 40 per cent over the past 18 months due to lower oil prices," said Ed James, director of content and analysis at Meed Projects.
"While the three Caspian Sea oil and gas producers have not been immune to this fall, they do offer alternative opportunities for companies struggling to win work in the Middle East, particularly given their proximity to the region."
The bulk of oil and gas projects in the three states lie offshore in the Caspian Sea itself, including the giant Shah Deniz and Kashagan oil and gas fields, which are some of the largest in the world.
Thanks to their relatively small populations, the governments of Azerbaijan, Kazakhstan and Turkmenistan have over the past two decades been able to use their oil and gas windfalls to invest in giant infrastructure schemes, including new railway and airport facilities.
In parallel, as the three nations' economies have grown, so too has the need for new power projects, with a particular focus on renewable energies.
"We selected Azerbaijan, Kazakhstan and Turkmenistan for the next phase of our geographic expansion because our market and customer research showed they represented the most attractive markets among our GCC clients," said James.
"Thanks to their geographic proximity to the Middle East and macroeconomic similarities, they are a natural extension for many firms looking to expand their presence beyond the region."
Major GCC company successes in the Caspian Sea region include Arabtec's $1 billion contract to build the Abu Dhabi Plaza project in Astana for Aldar, and Dubai-owned Dragon Oil's Cheleken concession in Turkmenistan.