Contractors in pole position for Upper Zakum field expansion
5 June 2026
Adnoc Offshore, the offshore oil and gas production arm of Abu Dhabi National Oil Company (Adnoc), is understood to be close to selecting contractors for a major project involving the next expansion phase of the Upper Zakum offshore field development in Abu Dhabi.
The project’s main objective is to increase the Upper Zakum field’s oil production capacity to 1.5 million barrels a day (b/d). The scheme is estimated to be worth more than $10bn, according to sources.
Adnoc Offshore has divided the UZ 1.5MMBD project’s engineering, procurement and construction (EPC) scope into three packages, MEED previously reported.
Based on Adnoc Offshore’s evaluation of technical and commercial bids, as well as rounds of negotiations with bidders, the following contractors are said to be favourites to win the three main EPC packages:
- Package 1: Tecnicas Reunidas (Spain)
- Package 2: NMDC Energy (UAE)
- Package 3: Tecnicas Reunidas
Official contract awards are expected in June, sources told MEED, although one person added that there was an “outside chance” the scenario could change, particularly regarding EPC package 2.
“Adnoc Offshore may well decide to award all three packages to Tecnicas Reunidas, considering the obvious benefits of one contractor taking charge of the entire project, and providing stability and cost efficiencies,” the source said.
Adnoc Offshore is understood to have issued the main tender for EPC works for the UZ 1.5MMBD project in the third quarter of last year.
Contractors submitted technical bids for package 1 by 21 November, while proposals for packages 2 and 3 were submitted by 14 November, MEED previously reported.
Contractors submitted commercial bids for package 1 by the deadline of 23 February this year, and for packages 2 and 3 by the 27 February deadline, according to sources. The earlier deadline for submission of commercial bids was 15 January.
In November 2024, MEED reported that Adnoc Offshore had awarded a contract for front-end engineering and design (feed) and pre-feed services on the project to France-headquartered contractor Technip Energies.
A kick-off meeting between Adnoc Offshore and Technip Energies took place on 21 November 2024.
UZ1.5MMBD project scope of work
Located 84 kilometres offshore in Abu Dhabi, Upper Zakum is the world’s second-largest offshore oil field and fourth-largest oil field.
The UZ 1.5MMBD project is the latest crude output expansion undertaken by Adnoc Offshore at the Upper Zakum field development.
The scope of work on the first EPC package involves surface facilities required on the field’s existing artificial islands, including integrated gas-lift compressors, produced water reinjection units, water treatment plants, pre-assembled manifolds and related facilities.
The second package includes offshore facilities and comprises multiple segments of subsea pipelines and subsea cables.
The third package covers work on Adnoc’s existing Zirku Island and will require multiple additional oil tanks, a water treatment unit, an export gas compressor, a condensate treatment unit and associated facilities for power and utilities.
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 b/d, with the project execution timeline eventually extended.
In April last year, 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 contract was estimated to be $825m.
The project’s main scope involved the EPC of several surface facilities and plants at the Upper Zakum offshore development’s 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.
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.
In November 2024, MEED reported that Adnoc Offshore had also selected Target for the second phase of the Upper Zakum 1.2 million b/d project (UZ 1.2MMBD EPC-2). The value of the contract was estimated to be about $500m, according to sources.
Target began work on the project in December last year, MEED previously reported.
The scope of work on the UZ 1.2MMBD EPC-2 project covers the EPC of several structures on Assefiya Island.
Adnoc Offshore performed the feed work on the UZ 1.2MMBD EPC-2 project in-house.
Upper Zakum oil production
Adnoc Offshore holds the majority 60% stake in the Upper Zakum hydrocarbons concession, with the other stakeholders being US-based ExxonMobil – which holds a 28% interest, and Japan’s Inpex Corporation holding a 12% interest through its subsidiary Japan Oil Development Company (Jodco).
Adnoc Offshore and its partners in the Upper Zakum concession have committed a total capital expenditure budget of approximately $30bn to maintain and ramp up the asset’s oil production capacity.
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, then to 1.2 million b/d through the two phases of the ongoing UZ 1.2MMBD project, and eventually to 1.5 million b/d.
Erstwhile 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 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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