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Aramco awards $2bn-plus contract for Marjan offshore field

20 August 2024

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Saudi Aramco has awarded Italian contractor Saipem an estimated $2bn-2.5bn contract that involves the engineering, procurement, construction and installation (EPCI) works for several structures at the Marjan oil and gas field development in Saudi Arabia.

The contract award is for tender number 127 in Aramco’s Contracts Release and Purchase Order (CRPO) system. The scope of work entails EPCI works for the following structures at the Marjan offshore field development:

  • Eight slipover jackets
  • Three production deck modules
  • Upgrade of auxiliary platforms
  • Laying of subsea pipelines and cables spanning 166 kilometres
  • Demolition of existing units

MEED previously reported that the contractors in Aramco’s Long-Term Agreement (LTA) pool of offshore service providers submitted technical bids and associated In-Kingdom Total Value Add (IKTVA) credentials for CRPO 127 by the 15 January deadline.

Offshore LTA contractors submitted commercial bids for CRPO 127 by 29 January.

The following contractors from Aramco’s LTA pool of offshore service providers are understood to have submitted bids for CRPO 127, according to sources:

  • Lamprell (UAE/Saudi Arabia)
  • Larsen & Toubro Energy Hydrocarbon (India)/Subsea 7 (UK)
  • NMDC Energy (UAE)
  • Saipem (Italy)

Aramco, eventually, in late June, requested LTA contractors to extend the validity of their bids for CRPO 127, along with five other offshore tenders, until the end of July. Contractors were then asked to extend the bid validity for these tenders until 9 September, sources told MEED.

Robust offshore spending

In late January, the Saudi energy ministry directed Aramco to abandon its campaign to expand its oil production spare capacity from 12 million barrels a day (b/d) to 13 million b/d by 2027. As a direct consequence of that government instruction, Aramco cancelled the tendering process for at least 15 CRPO jobs involving the EPCI of structures at key offshore oil fields, MEED previously reported.

Since that decision, however, Aramco has gone the other way. The Saudi energy giant has already spent an estimated $4-4.5bn on offshore EPCI contracts year-to-date, all of which have been awarded to Saipem.

ALSO READ: Aramco increases spending despite drop in profits

Before awarding CRPO 127 to Saipem, Aramco had awarded CRPOs 132 and 139 to the Italian contractor. Their combined value is estimated to be over $1bn. The scope of work on CRPOs 132 and 139 involves installing and upgrading structures at the Marjan and Zuluf offshore field developments, respectively.

Prior to those contracts, Aramco awarded Saipem the contract for CRPO 138, which involves laying a trunkline at the Abu Safah offshore field in Saudi Arabia. The contract is estimated to be worth $500m.

In early May, MEED reported that Aramco had awarded Saipem the contract for CRPO 143, which involves replacing an oil line between the Berri and Manifa oil fields in the kingdom’s Gulf waters.

Separately, in May, Aramco issued four tenders to its LTA contractors as part of a project to further expand the Zuluf offshore field development. The main objective of the project is to install multiple structures at the Zuluf field to maintain and raise its long-term oil and gas production potential.

Sources told MEED that the combined value of CRPOs 145, 146, 147 and 148 is estimated to be around $4bn. LTA contractors were initially due to submit bids for the four tenders by 22 August, but Aramco recently extended the deadline until 17 October.

ALSO READ: Aramco CEO expects capex to grow in 2025

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Indrajit Sen

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