The Abu Dhabi National Oil Company (ADNOC) has tapped a South Korean firm to help raise production capacity at its oldest onshore oilfield as it perseveres with expansion projects even as demand for oil falls. ADNOC's subsidiary, the Abu Dhabi Company for Onshore Oil Operations (ADCO), awarded an US$805 million (Dh2.95 billion) engineering, procurement and construction contract to SK Engineering to install gas compressors at the Bab field, the company said. "The project further demonstrates... that Abu Dhabi is proceeding with its strategic projects to allow the country to achieve its future production targets," it said. ADCO, which is 40 per cent owned by foreign firms and pumps about half of ADNOC's output, has emphasised it remains committed to multibillion-dollar capacity expansions despite the economic crisis and separate concerns about the looming expiry of concessions for its foreign partners. The project at Bab is part of a larger effort by ADCO to increase total production capacity from 1.4 million to 1.8 million barrels (bpd) per day by 2017. The company will achieve half that goal by 2013. The gas compressors are to be installed over 36 months, and will allow engineers to inject larger volumes of natural gas into the reservoir to squeeze out more crude. ADCO did not specify the size of the capacity boost to be generated by the new equipment, but long-term company plans leaked to a trade publication last autumn show the field eventually producing 435,000 bpd, from 350,000 bpd today. The Bab contract follows the awarding of $3.5bn worth of contracts to three firms in January for expansion of the Sahil, Asab and Shah oilfields by 60,000 bpd. Abdul Munim al Kindy, the general manager of ADCO, has said he expects to award a number of contracts this year, despite the fact the company has shut in a large proportion of existing capacity to comply with OPEC production quotas. ADCO reduced shipments of its flagship Murban crude by 10 per cent this month, and is due to deepen that cut to 15 per cent below normal volumes next month. "This project and the major investment demonstrate the country's commitment to play an active role in securing future energy supplies despite the currently available spare capacity," the company said. Foreign partners in ADCO include Shell, BP, ExxonMobil, Total and Partex, which operate under a 75-year concession that is due to expire in 2014. Analysts have warned that the expiry of concessions could lead foreign partners to defer new investments until after 2014, but the large contracts announced this year suggest ADCO has come to an understanding with its partners. Industry sources said the foreign partners agreed to pay their share of the new investment thanks to a mechanism known as "accelerated depreciation" that would allow them to recoup it before the concession's expiry. firstname.lastname@example.org
- Australia to begin exporting uranium for Abu Dhabi’s nuclear power plants
- Struggle to attract young Emiratis to offshore careers
- Taqa starts injecting natural gas at Dutch storage facility
- UAE support for oil price as demand picks up
- In pictures: Cyprus hopes for some windy weather
- India’s energy elephant only beginning to rumble
- Most Viewed
- Most Commented
- Most Viewed
- Most Commented
- History shines light on the true borders of Palestine
- Reduce speed limit buffer on UAE roads, experts urge
- Finishing touches to luxury Fortnum and Mason shop in Dubai
- American ‘has UAE Embassy documents’ to back up medicinal marijuana claim
- Nakheel to sell plots for hotels and resorts on Dubai’s Deira Islands
In pictures: Where Dubai rents have risen and fallen, Q1 2014
Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.
In pictures: Penthouse flat is height of Dubai luxury living
A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.
In pictures: Best business images for the week to April 17, 2014
Here are some of the best business images for the week to April 17, 2014.
In pictures: Shopper’s delight at Crawford Market in Mumbai
Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.
April corporate and economic calendar for the UAE and overseas
From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.
Rates report: Latest on UAE loans, accounts and credit cards
Souqamal.com brings you the latest interest rates on banking products in the UAE.