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Aramco selects contractors for $1.7bn offshore works

10 November 2023

 

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Saudi Aramco has selected contractors for three major contracts covering several structures at the Zuluf offshore oil and gas field development in Saudi Arabia. Their combined value is estimated to be about $1.7bn.

The Saudi energy giant has issued notices of award to contractors for tender numbers 135, 136 and 137 under its Contracts Release and Purchase Order (CRPO) system, according to sources.

The contractors selected to execute engineering, procurement, construction and installation (EPCI) on CRPOs 135, 136 and 137 and their estimated values are as follows:

  • CRPO 135 – Lamprell (UAE/Saudi Arabia) – $390m
  • CRPO 136 – NMDC Energy (UAE) – $900m
  • CRPO 137 – NMDC Energy (UAE) – $400m

The contractors are in the process of arranging financial guarantees and meeting legal and compliance requirements, sources told MEED. Aramco is expected to issue official contract awards “within the next few weeks”, they added.

Aramco issued the three tenders to its Long-Term Agreement (LTA) pool of offshore contractors in August. Offshore LTA contractors submitted bids for the tenders by 17 September.

CRPOs 135, 136 and 137 are revised tenders for CRPOs 99, 100 and 101, it was previously reported. Aramco awarded those tenders to US-headquartered McDermott International, but cancelled the contracts due to the contractor’s financial problems.

The EPCI scope of work on CRPOs 135, 136 and 137 is as follows:

  • CRPO 135 – Upgrade and installations at Zuluf tie-in platform (ZTP) 5:
    • Upgrade of three production deck modules (PDMs)
    • Installation of a slipover PDM
    • Installation of a new PDM
    • Upgrade of ZTP 5
       
  • CRPO 136 – Upgrade and installations at ZTP 3:
    • Upgrade of two PDMs
    • Installation of seven slipover PDMs
    • Installation of two 16-well PDMs
    • Installation of auxiliary platforms
    • Upgrade of ZTP 3
       
  • CRPO 137 – Supply of structures at Zuluf:
    • Provision of 22 15 kilovolt (kV) cables/pipelines covering a total length of 112 kilometres (km)
    • Provision of eight cables/pipelines covering a total length of 23km.

Aramco’s LTA pool of offshore service providers comprises the following entities:

  • Saipem (Italy)
  • McDermott International (US)
  • Larsen & Toubro Hydrocarbon Engineering (India) / Subsea 7 (UK)
  • Dynamic Industries (US)
  • National Petroleum Construction Company (UAE)
  • Lamprell (UAE/UK) / Royal Boskalis Westminster (Netherlands)
  • Sapura Energy (Malaysia)
  • Technip Energies (France) / MMHE (Malaysia)
  • China Offshore Oil Engineering Company (China)
  • Hyundai Heavy Industries (South Korea)

Most of the kingdom’s oil and gas production comes from its offshore hydrocarbons resources in fields including Abu Safah, Arabiyah, Hasbah, Berri, Karan, Manifa, Marjan, Ribyan, Safaniya and Zuluf.

Aramco aims to maintain and gradually increase productivity at these fields, some of which are mature.

In line with this, the state enterprise is expected to award more than $7bn-worth of offshore EPCI deals to entities in its LTA pool of offshore contractors by the end of this year.

Robust offshore spending

Aramco has awarded approximately $5.3bn-worth of contracts as part of this projected spending so far this year.

A consortium of Indian contractor Larsen & Toubro Energy Hydrocarbon (LTEH) and UK-based Subsea7 has won seven offshore EPCI contracts from Saudi Aramco, estimated to be worth close to $2bn.

LTEH/Subsea7 won CRPOs 98, 120 and 121, which cover EPCI work on Saudi Arabia’s Zuluf, Hasbah and Manifa offshore oil and gas fields. The combined value of the three CRPOs, awarded to the consortium in March, is estimated to be $1bn.

In April, LTEH/Subsea7 won CRPOs 117, 118 and 119, which cover EPCI work on Saudi Arabia’s Marjan offshore oil and gas field development. The three tenders are estimated to be worth over $900m.

The LTEH/Subsea7 consortium is also understood to have secured the contract for CRPO 97, which relates to the EPCI of various units at the Abu Safah field.

Italian contractor Saipem confirmed in early April that it had won CRPO 96, estimated to have a value of $120m. The scope of work on the tender covers the EPCI of one platform topside and the associated subsea flexible, umbilical and cable systems at the Abu Safah and Safaniya fields.

Also in April, China Offshore Oil Engineering Company won the CRPO 122 contract, estimated to be worth $255m, covering the installation of 13 jackets at the Safaniya field.

Saipem has also won CRPO 124, a contract that is part of the third gas development phase of the Marjan hydrocarbons field.

Aramco awarded Abu Dhabi’s National Petroleum Construction Company, which has recently rebranded as NMDC Energy, the contract for CRPO 128, which is estimated to be worth more than $500m. CRPO 128 mainly entails the EPCI of a subsea pipeline between the Zuluf and Safaniya oil field developments.

More recently, Lamprell announced winning a pair of offshore contracts – CRPOs 125 and 126, which have a combined value estimated to be “upwards” of $400m.

ALSO READ: Aramco focuses on upstream capacity building

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Indrajit Sen

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