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Adnoc receives prices for offshore oil project

15 November 2023

 

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Adnoc Offshore has received commercial bids from contractors 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 barrels a day (b/d).

Adnoc Offshore, the offshore oil and gas-producing subsidiary of Abu Dhabi National Oil Company (Adnoc Group), had set a deadline of 13 November for contractors to submit their prices for the project, MEED previously reported. The commercial bid submission deadline prior to that was 23 October.

The main scope of the project involves engineering, procurement and construction (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.

The following contractors, among others, are understood to be bidding for the Upper Zakum oil production increment project, according to sources:

  • Petrofac (UK)
  • Target Engineering Construction Company (UAE)
  • Tecnicas Reunidas (Spain)

Adnoc Offshore issued the main tender for the Upper Zakum offshore oil field production increment scheme to contractors in late February this year. 

Contractors submitted technical bids for EPC works on the project by 5 June, MEED previously reported.

The scope of work on the project comprises EPC works for the following structures:

Al-Ghallan Island

  • Production, water injection and produced-water disposal wells
  • Pre-assembled pipe racks and manifold
  • Gas lift compressor and glycol dehydration unit
  • Water injection plant
  • Produced-water treatment package
  • Gas turbine generators
  • Water-winning pump
  • Coarse filtration package
  • Air compressor and dryer package
  • Chemical injection packages
  • Module technical rooms
  • Electrical substation
  • Local equipment room

Umm al-Anbar Island

  • Booster gas compression package
  • Low-pressure gas cooler
  • Crude oil transfer pumps
  • Water-winning pump
  • Coarse filtration package
  • Instrument air compressor and dryer package and receiver
  • Nitrogen generation package and receiver
  • Low-pressure flare gas recovery compressor package
  • Electrical substation
  • Module technical rooms

Ettouk Island

  • Produced-water treatment package
  • New produced-water disposal header and disposal wells
  • Produced-water disposal pumps

Asseifiya Island

  • Produced-water treatment and re-injection train
  • Produced-water booster/disposal and re-injection pumps
  • Electrical substation
Upper Zakum expansion

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

Adnoc Offshore initiated the UZ1000 project in 2019, aiming to raise Upper Zakum’s oil production capacity to 1 million b/d by 2024. The goal has now been increased to 1.2 million b/d, according to the project’s EPC tender, with the completion timeline likely to have been extended.

Spanish contractor Tecnicas Reunidas was awarded the contract for the front-end engineering and design works on the UZ1000 project in 2019. UK-headquartered Wood Group was appointed as the project management consultant for the EPC phase.

The UZ1000 project has since been delayed, with sources attributing the slowdown, particularly the delay in Adnoc Offshore issuing the main EPC tender, to the Covid-19 pandemic.

“Covid certainly did slow down work on the project from Adnoc’s side. With high oil prices being favourable, and with its accelerated [oil and gas production] targets, Adnoc may want to push this project through,” one source previously said.

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 aim is to first raise the asset’s oil output from 640,000 b/d to 750,000 b/d through the UZ750 project, and then eventually to 1 million b/d through the current project.

Zakum Development Company (Zadco), which later merged into Adnoc Offshore, awarded EPC contracts for the UZ750 project in 2012 and early 2013.

The $817m first package was awarded to a consortium of Abu Dhabi’s 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 UZ750 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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