Samsung Heavy Industries and Samsung Engineering are set to bid for more than $10 billion worth of projects in the Middle East and North Africa (Mena) region between this year and the next, according to a report.

The two firms’ shareholders recently approved a merger, which will be officially finalised by December 1 and the name of the new company will be decided once the merger is complete, said the Zawya report.

"While the merger with SHI will not affect our basic strategies in the short-term, Samsung Engineering and SHI will jointly participate in pre-qualifications and further co-develop business opportunities in the region," JaeHoon Choi, vice president and head of the marketing division at Samsung Engineering, was quoted as saying.

"Between 2014 and 2015, we plan to bid for hydrocarbon and power projects worth over $10 billion in the region,” he said.

"We are expecting many more attractive projects to emerge in this region during 2014-2015 and anticipate more gas development and downstream projects in the region, compared to upstream projects."

In September, SHI, a leading shipbuilder, revealed plans to absorb Samsung Engineering, which builds petrochemical and energy facilities, for about $2.5 billion. The two merging companies had combined sales of about $25 trillion won last year, according to a Reuters report.

"We expect revenue of approximately $40 billion (40 trillion won)," Choi said.

He said that combing SHI's capabilities with Samsung Engineering's strong track record in the region would provide the new entity with a competitive edge in both the onshore and offshore energy sectors.

"Furthermore, through the merger we hope to become a major liquefied natural gas (LNG) player in the region, as we will be able to work on floating liquefied natural gas projects, and ultimately, enter the LNG liquefaction market," he added.

Choi said he sees a rise in investments in the power and infrastructure sectors in UAE and Saudi Arabia.

"We also have contracts awarded from Kuwait, Iraq and Algeria," he said.

Samsung Engineering is also expanding its footprint in Africa in an effort to diversify its regional market portfolio.

"As a result, we have successfully shifted from our 'comfort zone' (Middle East and Southeast Asia) and ventured into new markets including Africa, CIS, and the Americas. We have been also expanding to North Africa by leveraging our project track records via our work in the GCC market," he said.

"In terms of future strategy and vision, we are seeing Africa as our next market to focus. SHI has already established a strong market presence in the region by working closely with various international oil companies and global leading EPC companies, such as Technip and Saipem."

Meanwhile, many engineering, procurement construction (EPC) contractors in the Mena region are suffering from schedule delays and cost overruns, Choi was quoted as saying.

"Under a lump-sum turn-key (LSTK) agreement, EPC contractors are having a hard time managing and keeping tight project schedules and costs. For example, there are numerous multi-billion dollar EPC projects in progress in Saudi Arabia that require a significant workforce on site," he said.

"However, such large scale mobilisation is difficult in itself, let alone, to meet a tight project schedule in very harsh and remote project areas... Limited access to suitable subcontractors and difficulty in sourcing personnel to meet with localization standards compound the problem, often causing huge schedule delays or worse."

These rising risk factors and levels of complexity are forcing many EPC contractors to revise their strategy, he said.

"More recent analysis show companies are now acting more conservatively in terms of taking on new projects. Operationally, the tendering processes have become very strict recently. Tenders for some of the projects are delayed or even cancelled from time to time for many different reasons. In addition, the average duration of bid preparation and bid evaluation periods are being extended."