Abu Dhabi's first independently developed field is moving ahead with US$2.4 billion worth of contracts now signed.
Adnoc awards $2.4bn Sarb contracts
The first oilfield to be developed in Abu Dhabi without foreign shareholders is moving ahead with US$2.4 billion (Dh8.81bn) in contracts awarded, including plans for falcon-shaped islands.
Abu Dhabi National Oil Company (Adnoc) holds a 100 per cent interest in the Sarb development, unlike at other fields in the emirate where it retains a 60 per cent majority and spreads the risk and capital investment among the emirate and its foreign partners.
Abu Dhabi Marine Operating Company (Adma), which is carrying out the work for Adnoc, yesterday announced it had awarded a $1.89bn contract to Hyundai Engineering & Construction and a separate $515.4 million package to Petrofac to develop the Satah Al Razboot field.
Called Sarb for short, the field 120 kilometres off the coast of Abu Dhabi is expected to add 100,000 barrels per day (bpd) of capacity to UAE production, at present just shy of 3 million bpd.
"Sarb is one of Adnoc's sole-risk projects that are playing a key role in Abu Dhabi's efforts to increase its crude production capacity," said Adnoc in a press release.
As the emirate's leaders decide on the future of concessions that have lain in the hands of western supermajors for more than seven decades, Sarb offers a test case for independent development. At the same time fields such as Sarb require a longer timescale for a return on investment, making a $1 per barrel fee unattractive for most potential foreign partners.
Sarb originally fell under the Adma offshore concession, whose shareholders include BP, Total and Japan Oil Development, but with that contract expiring in 2018, international oil companies have little time to reap the returns of their investment.
Adma relinquished the field last year, although Adnoc has asked it to carry out the project.
The first stage in developing Sarb is the construction of two artificial islands, both shaped like falcons.
The islands will serve as bases for drilling and eliminate the need for offshore rigs - a technique being tested at the Upper Zakum field by ExxonMobil.
Hyundai is to build processing and export facilities to serve Sarb, while Petrofac will lay 200km of subsea pipelines, 55km of subsea power and communication cables and drilling facilities on the islands.
Engineers hope to get Sarb online in 2017, just a year before the expiration of the emirate's main offshore concession.
International oil companies are jockeying for a slice of Abu Dhabi's concessions both offshore as well as onshore, where existing rights are scheduled to expire next January.