Revenue generated by construction contractors working outside of their home countries decreased for the third consecutive year in 2016, falling to around 468 billion U.S. dollars. The 6.4 percent drop from the previous year represented the biggest revenue decline in recent years.

Oil slide spreads global gloom

One reason for the decline in international revenue was the collapse of oil prices – the annual average price of a barrel slumped to around 40 U.S. dollars in 2016. When the price of oil is so low, companies have little incentive to invest large amounts of money into exploration projects to find cheaper oil. As a result, fewer international contracts are awarded, and some projects are even canceled because there is simply no money to be made from them. On the other hand, revenue from domestic projects is likely to increase because construction companies can benefit from the low import price of oil, helping to bring production costs down.

International petroleum firms affected by oil prices

Technip – now known as TechnipFMC – was ranked as the leading international construction contractor in the petroleum market in 2016. With revenue figures of around 12 billion U.S. dollars from projects outside of its home country, the firm ranked among the top five international contractors in Europe. However, as a result of falling oil prices, the annual revenue of Technip dropped significantly in 2016, before recovering a year later with revenue increasing by more than 60 percent.