Mubadala plans to set up oil and gas services firm in joint venture with Petrofac to tap energy projects in the UAE.
Petrofac and Mubadala launch joint venture
Mubadala Development Company, a Government investment fund, announced today that it will partner with Petrofac, a UK-based oil services company, to create a new contracting firm in the UAE within a couple of months. "We plan to have a world-class engineering centre in Abu Dhabi with several hundred full-time staff within the next few years," said Rajesh Verma, the executive vice president for construction and engineering at Mubadala. Officials at Petrofac, the partner firm that is partly owned by Dubai-based Shuaa Capital, envision the joint venture competing with established global oil contractors to bid for onshore oil and gas projects across the country, taking on a sector that has long been dominated by foreign firms. A Mubadala spokesman said the new company would focus on designing and building large-scale facilities like refineries and drilling platforms, and would not be in the business of producing oil or building specialised equipment. Through its subsidiaries, the Abu Dhabi National Oil Company handles many of the day-to-day aspects of oil and gas production and field maintenance. To build large facilities, however, it has historically turned to established Western contractors such as Petrofac and Italy's Saipem, which can call on armies of experienced engineers to put up new structures quickly. The Mubadala spokesman said that until now, very few UAE firms had attempted to compete in the specialised contractor market. In the UAE, specialised contractors include Al Jaber Energy Services, Lootah BCGas and Subtec Middle East, but none has been tapped to complete key engineering projects. Mubadala, with its stated aim of investing in projects to diversify and develop Abu Dhabi's economy, sees the oil engineering sector as an opportunity to create a new grassroots company, according to Ibrahim al Ansari, the chairman of Mubadala Petroleum Services Company. "The establishment of this joint venture also furthers the diversification of Abu Dhabi in the energy sector and will contribute to ensuring the future sustainability of a very important industry through investment in local capabilities and human resources," said Mr Ansari. The choice of Petrofac was not surprising, given the fact that the company has long had a presence in the UAE. It operates a large office in Sharjah and last week opened a training centre in Dubai. It is also reported to be the lowest bidder for work on expansion of three oilfields by the Abu Dhabi Company for Onshore Oil Operations. Petrofac has specialised in engineering and design of large infrastructure, including gas plants and pipelines. Its biggest competitors in the region include Saipem, Spain's Tecnicas Reunidas and Technip, based in France. firstname.lastname@example.org