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A leading Middle Eastern contractor has emerged as a potential frontrunner for Abu Dhabi National Oil Co’s (Adnoc) coveted offshore deal involving the expansion of Upper Zakum, the United Arab Emirates’ largest offshore oil field.
The UAE state-owned giant is expanding production capacity at some of its largest offshore fields as part of its P5 plan, which aims to increase oil production to 5 million barrels per day by 2027 from the current 4 million barrels per day.
The Upper Zakum expansion project offered by Adnoc could increase production from the field to 1.2 million barrels per day over the next two to three years.
Multiple sources familiar with the matter told Upstream that UAE-based Target Engineering Construction Company has emerged as the lead on the offshore project.
“Target is well-positioned in the Upper Zakum deal, but the operator has not yet awarded a final contract,” one person noted.
Engineering Partner
French giant Technip Energies is also said to be working with Target as a subcontractor on the engineering, procurement and construction project, another person said.
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Sources said Britain’s Petrofac and Spain’s Tecnicas Reunidas had also submitted technical and commercial bids for the Upper Zakum project, but Target had a clear advantage over other competitors.
Adnoc declined to comment on the offshore EPC project.
China Petroleum Engineering & Construction Corporation (CPECC) was one of the companies initially interested in the Upper Zakum project, but the contractor chose to withdraw from the bidding process.
The scope of work
The project is centered around artificial islands and may include surface facilities consisting of multiple production, injection and water treatment wells.
Upstream understands that expansion of a key water injection plant and chemical injection unit, as well as several other associated surface facilities, are also part of the scope of work.
Adnoc’s previous expansion phase, UZ 750, was conducted through multiple EPC contracts, helping to increase the field’s production capacity to 750,000 barrels per day.
production capacity
Although Abu Dhabi National Oil Co. does not disclose the specific output of its offshore oil fields, Upper Zakum’s output is currently close to 1 million barrels per day.
UZ 750 includes four new artificial islands, processing facilities and infrastructure to handle the increased production capacity, effectively creating an onshore environment at sea.
The artificial islands, named Aseeifiya, Ettouk, Al Ghallan and Umm Al Anbar respectively, can accommodate 450 wells and 90 platforms, as well as drilling machines, processing facilities and other related infrastructure.
A multi-billion dollar expansion
According to Adnoc, the total value of the UZ 750 and UZ 1000 projects could be close to $30 billion.
UK-based Wood Group is involved in the development as the main project management consultancy contractor.
In addition to majority-owned Abu Dhabi National Oil Co, Upper Zakum’s stakeholders include U.S. supermajor Exxon Mobil and Japan’s Inpex, both of which won the right to extend the concession by 10 years. The rights will expire at the end of 2051.
The Upper Zakum oil field is located in the Persian Gulf and covers an area of approximately 1,200 square kilometers, approximately 84 kilometers northwest of Abu Dhabi.
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