GCC countries bucked the global trend of falling global upstream capex to keep drilling at record levels in 2016. While the IEA expects global capex to have fallen 24% in 2016, heavyweight producers Saudi Arabia and Abu Dhabi both ran record numbers of rigs in 2016: monthly averages of 125 and 48 respectively, according to Baker Hughes figures.

The national oil companies (NOCs) in the GCC have capitalized on costs plunging alongside oil prices since the second half of 2014. Contracts have...