A UAE-based project study group, investigating 578 current projects in the GCC region with a budget value of more than $690 billion, has said projects amounting to 30 per cent of that value have been put on hold or cancelled.

Proleads also said in a report that another 30 per cent were under construction and 40 per cent in the pre-construction phase.

Commenting on the report, Emil Rademeyer, director of Proleads, said: 'GCC countries have been taking a long, hard look at spending in the wake of the global recession, falling demand and the volatility of oil markets with projects rescheduled to take advantage of lower costs or cancelled.'

Rademeyer said there remained a huge amount of activity in the GCC oil, gas and petrochemical sectors, earnings from which constituted about 85 per cent of the region's export revenues.  He added that expectations were that demand for hydrocarbons and refined product could pick up as the global economy gradually pulled out of recession.

The Proleads Insight report covers projects in the oil and gas production and refining sectors with values greater than $10 million each in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

It projects cashflow in the GCC hydrocarbon market to stabilise in 2010 at levels similar to those found in late 2007. 'However, the cashflow picture could rapidly deteriorate if projects in the pipeline scheduled to begin construction do not start as planned,' said Rademeyer. The report finds, for example, that almost one third of petrochemical projects in Saudi Arabia are currently on hold.

Overall, the GCC oil sector, to which Saudi Arabia contributes most, has currently 281 projects worth $304 billion, 89 per cent of which are in the construction or pre-construction phases.  The gas sector - with Qatar leading the way - has 155 projects worth $178 billion with 85 per cent under construction or pre-construction. Saudi Arabia is the largest contributor in the petrochemical sector with 142 projects worth $207 billion - 72 per cent of which are under construction or pre-construction.