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
What will be the big trend in the technology world in 2014?
What will be the dominant trends over the next twelve months? Let us know by taking our online poll.
Homefront: no rent cap on property in DIFC
Property expert Mario Volpi is here to help readers with their property issues.
UAE developments light up the International Property Awards
Etihad Towers on the Abu Dhabi Corniche and Akoya by Damac on the outskirts of Dubai were both recognised by the IPA in a set of awards for the best architecture on the globe.
In pictures: Etihad’s new destinations for 2014
The Abu Dhabi carrier is heading to all corners of the globe on its new routes.
Put your UAE mortgage on the map
Ever wonder what your neighbours pay on their home loan? The National has launched a way to compare rates around the country, with the goal of improving the UAE's financial transparency.
Rates report: Latest on UAE loans, accounts and credit cards
Souqamal.com brings you the latest interest rates on banking products in the UAE.
- Nuclear energy’s benefits becoming more obvious, says UAE
- OMV to sell stake in German refinery
- Dana Gas prepares to have Turkey seize KRG assets
- Technip wins $400m deal to help develop Kuwait’s oil and gas infrastructure
- Saudi oil future ‘unlikely’ to be hit by US shale revolution
- Taqa gets approval to develop Morrone UK North Sea field
- Most Viewed
- Most Commented
- Most Viewed
- Most Commented