x Abu Dhabi, UAEWednesday 24 January 2018

NPCC lands $800m offshore oil contract

Oil 2014: The National Petroleum Construction Company has won a contract worth around $800m to develop an offshore oil field in Abu Dhabi.

National Petroleum Construction Company (NPCC) has won a contract worth about US$800m to develop an offshore oilfield in Abu Dhabi.

The government-controlled contractor was selected by the Abu Dhabi National Oil Company (Adnoc) for the first of two construction packages for production facilities at the Umm Lulu field, sources at NPCC have confirmed.

The full field development of Umm Lulu is part of a wider push by the Abu Dhabi Marine Operating Company (Adma-Opco), an Adnoc subsidiary, to boost its production by 300,000 barrels per day (bpd) over the next five years.

NPCC's work at Umm Lulu includes the construction of wellhead towers, pipelines and associated facilities, according to a report in the Middle East Economic Digest (Meed).

The second package is wider in scope, and worth about twice as much as the NPCC deal. According to Meed, France's Technip and South Korea's Samsung Engineering resubmitted their proposals after the lowest bidder, the Italian contractor Saipem, had its $1.5 billion bid disqualified.

Offshore output plays an integral part in Abu Dhabi's plans to raise production capacity from about 2.8 million bpd to 3.5 million bpd by 2017, and efforts to increase production are gathering pace.

In April, Adma-Opco awarded contracts worth $2.8bn to develop the Satah Al Razboot field. The UK's Petrofac and South Korea's Hyundai Engineering & Construction will complete the bulk of the construction, including the creation of a falcon-shaped artificial island. The field will add 100,000 bpd to Abu Dhabi's production.

Within the same month, the Zakum Development Company - another Adnoc subsidiary - awarded a $3.7bn package to develop the Upper Zakum megafield to Petrofac Emirates and Daewoo Shipbuilding & Marine Engineering. The first package was awarded last year, and the upgrade will increase capacity at the world's second-largest offshore oil field by 50 per cent to 750,000 bpd.

Adnoc's drive to ramp up offshore capacities draws heavily on state-owned contractors. NPCC is majority owned by Senaat, the government conglomerate behind efforts to industrialise the emirate.

Petrofac Emirates is a joint venture between the private company Petrofac and Mubadala, the Abu Dhabi government-owned strategic investment company.

While Adu Dhabi is increasingly using its own companies to develop its oil resources, it still relies on foreign expertise and technology. Adma-Opco is a joint venture between Adnoc, BP, France's Total and Japan's Jodco. Zadco is a joint venture between Adnoc, the US major ExxonMobil and Jodco.

Umm Lulu lies about 30 kilometres off the coastline to the north-east of Abu Dhabi city. Adma-Opco is also preparing to award tenders for the full field development of the Nasr field this year.