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Adnoc awards Upper Zakum field expansion contract

12 November 2024

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Adnoc Offshore has awarded the main contract for the second phase of a project to increase the oil production potential of Abu Dhabi’s largest producing oil asset – the Upper Zakum offshore field – to 1.2 million barrels a day (b/d).

Abu Dhabi-based Target Engineering Construction Company has won the contract for engineering, procurement and construction (EPC) works on the project, which is known as UZ 1.2MMBD EPC-2.

The value of the contract awarded by the offshore business of Abu Dhabi National Oil Company (Adnoc Offshore) is understood to be about $500m, according to sources.

MEED recently reported that Adnoc Offshore was close to awarding the main contract for the UZ 1.2MMBD EPC-2 project.

Apart from Target, the other bidders for the project included Greece-based Archirodon and UK-headquartered Petrofac.

Adnoc Offshore received technical bids for the project by the 14 August deadline. Contractors submitted commercial bids for the project by the deadline of 2 October, MEED previously reported.

Located 84 kilometres offshore in Abu Dhabi, Upper Zakum is the world’s second-largest offshore oil field and fourth-largest oil field.

The Upper Zakum offshore development consists of four main artificial islands: Al-Ghallan, Umm Al-Anbar, Ettouk and Asseifiya – also known as Central Island, West Island, North Island and South Island, respectively.

The scope of work on the UZ 1.2MMBD EPC-2 project covers the EPC of the following structures on Assefiya Island:

  • Integrated gas lift compressor and its associated facilities
  • Gas dehydration unit
  • Vapour recovery system
  • Electro-chlorination package
  • Seawater winning pumps
  • Seawater filtration package
  • Instrument air compressor
  • Air dryer package
  • Nitrogen generation package
  • Chemical injection package (scale inhibitor and biocide injection)
  • Pre-assembled pipe racks
  • Modular variable frequency drives room
  • Modular technical rooms
  • Piping tie-ins connection with existing facilities
  • Electrical, instrumentation and control and telecommunications tie-ins

Adnoc Offshore has performed the front-end engineering and design (feed) work on the project in-house, it said in the expression of interest (EoI) document.

MEED previously reported that Adnoc Offshore issued the EoI document for the EPC tendering phase on 8 February, with contractors submitting responses by 26 February.

Adnoc Offshore then issued the main EPC tender for the project “in early June”, sources told MEED.

Upper Zakum expansion

The first phase of the programme to raise the Upper Zakum offshore field development’s oil production capacity to 1.2 million b/d was launched in 2019. The initial goal was to increase the field’s output potential to 1 million b/d by 2024, which was later increased to 1.2 million, with the project execution timeline eventually extended.

In April, MEED reported that Adnoc Offshore had awarded the main EPC contract for the UZ 1.2MMBD EPC-1 project to UAE-based Target Engineering Construction Company. The value of the EPC contract won by Target is estimated to be $825m.

Spanish contractor Tecnicas Reunidas won the contract for the feed works on the UZ 1.2MMBD EPC-1 project in 2019. UK-headquartered Wood Group was appointed as the project management consultant for the EPC phase.

The project’s main scope involves the EPC of several surface facilities and plants at the Upper Zakum offshore development’s four main artificial islands.

Upper Zakum oil production

Adnoc has committed to a capital expenditure budget of approximately $30bn, along with its operating partners in the Upper Zakum hydrocarbons concession, Japan Oil Development Company (Jodco) and US-based ExxonMobil. 

The strategic objective is to first raise the asset’s oil output from 640,000 b/d to 750,000 b/d through the UZ 750 project, and then eventually to 1.2 million b/d through the two phases of the ongoing UZ 1.2 MMBD project.

Zakum Development Company (Zadco), which later merged into Adnoc Offshore, awarded EPC contracts for the UZ 750 project in 2012 and early 2013.

The $817m first package was awarded to a consortium of Abu Dhabi’s NMDC Energy (then known as National Petroleum Construction Company) and France-based Technip Energies. Package two, the project’s largest EPC package, worth $3.7bn, was awarded to a consortium of UK-headquartered Petrofac and South Korea’s Daewoo Shipbuilding & Engineering.

EPC work on UZ 750 began in 2014 and was completed in 2022.

In October 2022, Adnoc Group subsidiary Adnoc Drilling set a world record for drilling the longest oil and gas well at the Upper Zakum concession, stretching 50,000 feet.

The extended-reach wells will tap into an undeveloped part of the Upper Zakum reservoir, potentially increasing the field’s production capacity by 15,000 b/d without expanding or building any new infrastructure, Adnoc said.

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Indrajit Sen

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