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Favourite emerges for Lower Zakum offshore project

8 May 2024

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Abu Dhabi-based NMDC Energy has pulled ahead in the race to win the main contract for a project to boost oil production at the Lower Zakum offshore hydrocarbons concession in Abu Dhabi.

The offshore arm of Abu Dhabi National Oil Company (Adnoc Offshore) holds the majority 60% stake in the Lower Zakum asset. Foreign partners include a consortium of Indian 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%).

The Lower Zakum hydrocarbons zone is 65 kilometres northwest of Abu Dhabi in the Gulf’s waters. Adnoc Offshore and its partners in the Lower Zakum concession intend to sustain oil production from the asset at its current level of 450,000 barrels a day (b/d) until 2025, and then increase output to 470,000 b/d.

This target will be achieved through the Lower Zakum early production scheme 2 (EPS 2) and the Proved Developed Producing (PDP) project.

Adnoc Offshore received technical bids for engineering, procurement and construction (EPC) works on the Lower Zakum EPS 2/PDP project by 11 September last year, as MEED previously reported.

Contractors submitted commercial bids for the project on 19 December.

Following months of bid evaluation, negotiations and discussions with bidders, NMDC Energy has emerged as the favourite to win the main EPC contract for the Lower Zakum EPS 2/PDP project, sources told MEED.

The following contractors, among others, are understood to have submitted bids for the project:

  • China Petroleum Engineering & Construction Company (China)
  • McDermott (US)
  • NMDC Energy (UAE)
Lower Zakum EPS 2/PDP project

The project’s basic scope of work involves drilling 17 additional producer and water injection wells on two new wellhead towers (WHTs) and expanding the gas compression capacity of the Zakum West Super Complex (ZWSC).

Integrating the Lower Zakum complexes with the onshore power grid at UZ AGI for electricity supply to the EPS 2/PDP project is part of the scope.

Demolition of structures and as-built documentation and surveying are also included in the scope of work.

UK-headquartered Wood Group has performed front-end engineering and design (feed) work on the Lower Zakum EPS 2/PDP project. Adnoc Offshore awarded Wood the feed contract in November 2022, according to sources.

Adnoc Offshore solicited interest for the Lower Zakum EPS 2/PDP project EPC works in December 2022. Contractors expressed interest in participating in the main EPC contract tendering process in January 2023.

NMDC Energy is already executing EPC works on another project at the Lower Zakum concession.

In September 2022, Adnoc Offshore awarded the Abu Dhabi government-owned contractor a $548m contract to build a new main gas line at the Lower Zakum field. The line is expected to increase the asset’s gas production capacity from 430 million cubic feet a day (cf/d) to 700 million cf/d.

ALSO READ: Contractors prepare bids for mega Lower Zakum oil project

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Indrajit Sen

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