meed-logo

line1 line2 line3
SIGN IN / REGISTER

Adnoc sees project spending uptick

25 April 2024

The latest news from the UAE's upstream sector includes:

> Contractor orders compressors for Adnoc project
> Adnoc Offshore awards Upper Zakum contract
> Contractors prepare bids for Lower Zakum oil project
> Adnoc Onshore awards contracts for well tie-ins packages
> Adnoc Onshore evaluates prices for fields upgrade
> Kent wins framework agreement with BP
> Dubai-based company wins Egypt oil contract extension

 

Abu Dhabi National Oil Company (Adnoc) spent close to $22bn last year on upstream projects, making it one of the best years on record for oil and gas project capital expenditure (capex) in the UAE, if not the top.

Adnoc and its partners in the Ghasha concession dominated spending in 2023, awarding contracts worth $16.94bn in early October for engineering, procurement and construction (EPC) works on the Hail and Ghasha sour gas production project.

The investment represents the largest-ever capex on a single oil and gas project in the UAE. It marks a giant leap for the country in its goal to become self-sufficient in natural gas production. As such, the project investment is also having a galvanising, trickle-down effect on the UAE oil and gas supply chain.

The Hail and Ghasha fields are part of Abu Dhabi’s Ghasha concession, which is expected to produce more than 1.5 billion cubic feet a day (cf/d) of gas before the end of this decade.

Adnoc holds the majority 55% stake in the Ghasha concession. The other stakeholders are Italian energy major Eni with 25%, Germany’s Wintershall Dea with 10%, and Austria’s OMV and Russia’s Lukoil, each with 5%.

A consortium of Abu Dhabi’s NMDC Energy and Italian contractor Saipem was awarded the project’s offshore EPC package. Its value is $8.2bn, with Saipem declaring its share to be worth $4.1bn. 

The scope of work broadly involves the EPC of offshore facilities, including facilities on artificial islands and subsea pipelines.

Italy-headquartered Tecnimont was awarded the onshore EPC contract. The $8.74bn contract relates to the EPC of onshore facilities, including carbon dioxide (CO2) and sulphur recovery and handling.

Robust spending

Adnoc is expected to maintain robust spending on upstream projects this year, if not match the 2023 level, as it strives to achieve its oil and gas production targets. The Abu Dhabi energy giant aims to attain an oil production capacity of 5 million barrels a day (b/d) by 2027 and become self-sufficient in gas production by the end of this decade.

Adnoc is understood to have already spent more than $2.3bn so far this year on projects deemed vital to reaching its crude production goal.

Adnoc Group subsidiary Adnoc Offshore awarded the main EPC contract in mid-March for 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 b/d.

UAE-based Target Engineering Construction Company won the contract for the project, which is estimated to be worth $825m. 

The main scope of work on the project involves the EPC of several surface facilities and plants at the Upper Zakum offshore development’s four main artificial islands of Al-Ghallan, Umm Al Anbar, Ettouk and Asseifiya – also known as Central Island, West Island, North Island and South Island, respectively.

Also in 2024, another Adnoc Group subsidiary, Adnoc Onshore, has awarded main contracts totalling more than $1.5bn for two packages on a project involving the conversion of wells and the installation of associated tie-ins at the southeast cluster of oil fields in Abu Dhabi.

Package 3 covers the EPC of well tie-ins and other associated structures at the Asab and Sahil oil fields, while package 4 relates to the Shah, Qusahwira and Mender fields.

Adnoc Onshore split the scope of work on packages 3 and 4 and appointed two contractors for each package.

Pakistan-headquartered Descon Engineering and Galfar Engineering & Construction Emirates, the UAE division of Omani contractor Galfar Engineering & Contracting, have won contracts for package 3, according to sources.

Galfar Engineering & Construction Emirates has also won a contract for package 4, while Abu Dhabi-based Al Nasr Contracting Company has secured the other contract, sources said. The combined values of the EPC contracts awarded by Adnoc Onshore for packages 3 and 4 are estimated to be $790m and $760m, respectively.

Upcoming tenders

Looking ahead, Adnoc Offshore is also preparing to issue the main EPC tender for a second phase of the project to increase the oil production capacity of the Upper Zakum field development.

Separately, contractors are preparing bids for a major project to boost oil production at the Lower Zakum offshore hydrocarbons concession in Abu Dhabi.

The Lower Zakum hydrocarbons zone is 65 kilometres northwest of Abu Dhabi in the Gulf’s waters. Adnoc Offshore holds the majority 60% stake in the Lower Zakum asset. Foreign partners include an Indian consortium of companies led by ONGC Videsh (10%), Japan’s Inpex Corporation (10%), China National Petroleum Corporation (10%), Italy’s Eni (5%) and France’s TotalEnergies (5%).

Adnoc and its partners in the Ghasha concession dominated spending in 2023, awarding contracts worth $16.94bn in early October for EPC works on the Hail and Ghasha sour gas production project

Adnoc Offshore’s larger, longer-term objective is to raise the asset’s output capacity to 520,000 b/d by 2027 and maintain that level until 2034. This strategic goal will be accomplished through the Lower Zakum Long-Term Development Plan (LTDP-1) project.

Adnoc Offshore issued the main EPC tender for the multibillion-dollar Lower Zakum LTDP-1 project in March. Contractors invited to bid have until the end of July to submit technical bids for the project, while commercial bids are due in September.

Adnoc Offshore intends to award EPC contracts for the Lower Zakum LTDP-1 project by the end of the year.

MEED's April 2024 special report on the UAE includes:

> COMMENT: Non-oil activity underpins UAE economy
> GVT & ECONOMY: Non-oil activity underpins UAE economy
> BANKING: UAE banks seize the moment
> DOWNSTREAM: UAE builds its downstream and chemicals potential
> POWER: UAE marks successful power project deliveries
> WATER: Dubai tunnels project dominates UAE pipeline
> DUBAI CONSTRUCTION: Dubai real estate boosts construction sector
> ABU DHABI CONSTRUCTION: Abu Dhabi makes major construction investments

https://image.digitalinsightresearch.in/uploads/NewsArticle/11705970/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Consultant wins Jeddah metro design

    22 May 2026

     

    French engineering firm Egis has been appointed to undertake the preliminary design consultancy for the Jeddah Metro Blue Line project.

    The project client, Jeddah Development Authority, issued the tender in early January, when MEED exclusively reported that Saudi Arabia had restarted plans to build the Jeddah Metro.

    Engineering consulting firms submitted bids in April, as MEED reported.

    The Blue Line will run from King Abdulaziz International airport and connect to the Haramain high-speed railway station.

    The line will be 35 kilometres (km) long and will include 15 stations.

    Project history

    Plans for the Jeddah Metro were first publicly floated in the early 2010s and were formally packaged into a wider Jeddah public transport programme around 2013-14.

    In 2014, French engineering firm Systra was appointed to complete preliminary engineering for the Jeddah Metro, as MEED reported at the time.

    In the same year, US-based engineering firm Aecom was awarded a SR276m ($74m) contract to provide pre-programme management consultancy services.

    Under its 18-month contract, Aecom was expected to provide staff to support preliminary planning and design work for various phases of the metro project.

    This was followed by the appointment of UK-based architectural firm Foster + Partners in 2015 to design the metro stations.

    The project then stalled as government spending priorities were reset and major capital programmes were reviewed following the fall in oil prices in 2015, with the metro’s scope, cost and delivery model coming under reassessment.

    Early concept designs envisaged a multi-line network integrated with buses and, later, other city-wide mobility upgrades.

    Route details

    According to Jeddah Transport Company’s website, the scheme comprises 81 stations and 197 trains serving more than 161km. The network will have four lines:

    • Orange Line: a 44.8km line running along Al-Madinah Road and Old Makkah Road, with 29 stops including one at Obhur Bridge
    • Blue Line: a 35km line running from King Abdulaziz International airport to the Haramain high-speed railway station, with 15 stations
    • Green Line: a 17km line running through the city centre, from the downtown area to the Haramain railway station, with nine stops
    • Red Line: A 59.7km line running from King Abdullah Stadium north to Old Makkah Street through King Abdulaziz Road and King Abdullah Road, with 25 stops

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16949416/main.jpg
    Yasir Iqbal
  • Egypt signs gas deal with QatarEnergy and Exxon Mobil

    22 May 2026

    Egypt’s Ministry of Petroleum & Mineral Resources has signed a preliminary gas agreement with state-owned QatarEnergy and US-based Exxon Mobil.

    The memorandum of understanding (MoU) focuses on cooperation in the development of natural gas discoveries in Cyprus.

    The plan involves transporting gas from offshore discoveries in Cypriot waters to Egypt via pipelines.

    In a statement, Egypt’s Ministry of Petroleum & Mineral Resources said that the deal would strengthen the North African country’s status as a regional hub for natural gas trading.

    The agreement was witnessed by Egypt’s Prime Minister Mustafa Madbouli.

    It was signed by Muhammad Al-Bajouri, from the legal affairs department of the Ministry of Petroleum & Minerals, and Kanan Nariman, vice-president for the development of liquefied natural gas (LNG) at Exxon Mobil.

    It was also signed by Ali Immunae, director of international exploration and production at QatarEnergy.

    Commenting on the MoU signing, Saad Sherida Al-Kaabi, the minister of state for energy affairs, and president and chief executive of QatarEnergy, said: “This MoU represents an important step in advancing regional energy cooperation across the Eastern Mediterranean through unlocking the long-term commercial potential of natural gas resources across that region.”

    Egypt’s Ministry of Petroleum & Mineral Resources said the agreement paved the way for QatarEnergy and Exxon to take advantage of existing Egyptian infrastructure in the gas sector, especially the country’s existing LNG export terminals.

    Under the terms of the agreement, a study will be conducted to analyse the feasibility of linking the gas discoveries in Cyprus to Egypt’s gas facilities.

    The signatories will also establish a commercial framework aimed at achieving “the maximum possible benefit from natural gas resources in both Egypt and Cyprus”.

    Egypt’s Minister of Oil and Gas Karim Badawi said the ministry has been working with ExxonMobil to explore cooperation on the development of gas discoveries in Cyprus.

    He said the partnership with Egypt would help QatarEnergy and Exxon reduce the cost of developing the discoveries while allowing Egypt to achieve an economic return.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16944918/main.jpg
    Wil Crisp
  • Kuwait’s Heisco working on active projects worth $3.5bn

    22 May 2026

     

    Kuwait’s Heavy Engineering Industries & Shipbuilding Company (Heisco) is in a strong position to weather challenges in the country’s project market, with active projects worth $3.5bn, according to documents seen by MEED.

    The company also has active maintenance and service contracts that are worth $843m.

    Heisco’s projects span the oil, gas, power, water, construction, transport and industrial sectors.

    The company’s biggest active project contract is the $576m project to upgrade Kuwait’s Doha West power station.

    This contract was awarded to Heisco by Kuwait’s Ministry of Electricity, Water & Renewable Energy (MEW) in July 2024.

    The company’s second-biggest active project is focused on the construction of crude oil pipelines and associated works in North Kuwait.

    This $565m contract was awarded to Heisco by Kuwait’s state-owned upstream operator Kuwait Oil Company (KOC) in February this year.

    Other major project contracts include a $442m MEW contract for the rehabilitation of the Az-Zour South power and water distillation station and a $223m KOC contract for the construction of flowlines and associated works in the West Kuwait Area.

    Heisco’s biggest active maintenance contract is worth $295m and is focused on providing mechanical maintenance services at Kuwait’s Mina Abdullah Refinery.

    This contract was awarded by the state-owned downstream operator Kuwait National Petroleum Company (KNPC) in July 2023 and it officially started in September that year.

    The contract is currently due to conclude in November 2028.

    Heisco’s second-biggest active maintenance contract is worth $95m and was awarded by Wafra Joint Operations (WJO) for work in the Divided Zone, which is shared by Kuwait and Saudi Arabia.

    WJO’s onshore operations cover an area of about 5,000 square kilometres in the Divided Zone.

    Saudi Arabian Chevron and Kuwait Gulf Oil Company are equal shareholders in WJO.

    Six major fields have been discovered in the WJO area to date: Wafra, South Fuwaris, South Umm-Gudair, Humma, Arq and North Wafra.

    Heisco’s Wafra maintenance contract was awarded in October last year and officially started in November the same year.

    The contract is expected to conclude in May 2031 and its scope is focused on the maintenance of tanks and vessels as well as the provision of welding services.

    Market headwinds

    Kuwait’s oil and gas sector has been severely impacted by the blockade of the Strait of Hormuz, through which all of its crude exports are normally shipped.

    The country recorded zero crude oil exports in April for the first time since the end of the Gulf War in 1991, according to shipping monitor TankerTrackers.com.

    While the closure of the Strait of Hormuz is expected to have a significant impact on Kuwait’s project sector for some time, Heisco’s strong project pipeline is likely to help it weather the challenging economic environment.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16792105/main.png
    Wil Crisp
  • Eni makes oil and gas discovery in Egypt

    22 May 2026

    A joint venture of Italy’s Eni and state-owned Egyptian General Petroleum Corporation (EGPC) has made a major oil and gas discovery in Egypt’s Western Desert region.

    The partnership, known as Agiba Petroleum Company, made the discovery with an exploratory well drilled in the Bustan South block.

    Initial estimates indicate the presence of approximately 330 billion cubic feet of gas and 10 million barrels of condensate and crude oil.

    Together, this is a total of 70 million barrels of oil equivalent (boe), making the discovery Agiba Petroleum Company’s biggest in 15 years.

    The new discovery is located only 10 kilometres from existing facilities and infrastructure, which should enable rapid development and connection to production.

    The well revealed several sandstone and limestone reservoirs, according to a statement from Egypt’s Ministry of Petroleum & Mineral Resources.

    The ministry said: “This new discovery reflects the success of the Ministry of Petroleum & Mineral Resources’ efforts and the incentives it offered to partners to intensify exploration activities in areas adjacent to existing fields.

    “This facilitates new discoveries near existing infrastructure and production facilities without the need for new infrastructure development.

    “This contributes to reducing the cost of producing a barrel, accelerating the integration of discoveries into the production map, and encouraging partners to implement the latest data collection and analysis technologies to increase the chances of successful exploration.”

    Egypt is seeing increased interest in its oil and gas resources due to disruptions to shipping through the Strait of Hormuz, which have significantly reduced oil and gas exports from the GCC and Iraq.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16944815/main.jpg
    Wil Crisp
  • King Salman airport selects three contractors for apron ECI

    21 May 2026

     

    Saudi Arabia’s King Salman International Airport Development Company (KSIADC) has selected three groups to deliver the Terminal 6 apron, taxiways and other airfield infrastructure at King Salman International airport (KSIA) in Riyadh.

    KSIADC, which is backed by Saudi sovereign wealth vehicle the Public Investment Fund, will initially deliver the project on an early contractor involvement (ECI) basis.

    The selected groups are:

    • Nesma & Partners / Limak / Samsung C&T / Alayuni Investment & Contracting (local/Turkiye/South Korea/local)
    • Shibh Al-Jazira Contracting Company / Top International Engineering Corporation (local/China)
    • Al-Rashid Trading & Contracting Company / IC Ictas (local/Turkiye)

    The ECI process requires selected contractors to submit methodologies for the project and a design proposal. One team will then be selected for the construction.

    MEED understands that the total package could be worth upto $800m.

    In March, MEED exclusively reported that KSIADC had selected three groups for the construction of Terminal 6 at KSIA in Riyadh.

    In November last year, MEED exclusively reported that KSIADC was targeting mid-2026 to award the contract for the construction of Terminal 6.

    MEED reported in May 2025 that US firm Bechtel Corporation had been appointed as the delivery partner for the terminals at KSIA.

    According to local media reports, KSIADC’s acting CEO, Marco Mejia, said the project developer had completed the project’s masterplan.

    The reports added that Terminal 6 will boost the airport’s capacity by 40 million passengers.

    The project is expected to be delivered before the start of Expo 2030 Riyadh.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16937556/main.jpg
    Yasir Iqbal