Contract dispute delays Aramco field development
Saudi Aramco is facing further delays on the Abu Hadriyah, Fadhili and Khursaniyah oil field development after failing to convert the largest contract with US-based Bechtel and France's Technip from a cost-reimbursable basis to lump-sum turnkey status.
Aramco was understood to have made a verbal agreement with the two contractors in mid-June to change the terms of the contract. However, disputes over the agreement of a lump-sum turnkey price are thought to have delayed the formal signing of the new deal.
A source close to the project says the scheme is moving more slowly than expected as it continues on a cost-reimbursable basis.
An Aramco spokesman says the project will still be completed on schedule by the end of 2007. Bechtel and Technip were unavailable for comment.
Package two, the gas processing component of the 500,000-barrel-a-day field, was one of the first to be awarded by Aramco on a convertible lump-sum turnkey basis in 2005 (MEED 15:6:07).
Under the original plan, conversion was expected to take place once 50-60 per cent of the engineering had been completed. About 75 per cent of the project is understood to have reached that stage.
Saudi Aramco is facing further delays on the Abu Hadriyah, Fadhili and Khursaniyah oil field development after failing to convert the largest contract with US-based Bechtel and France's Technip from a cost-reimbursable basis to lump-sum turnkey status.
Aramco was understood to have made a verbal agreement with the two contractors in mid-June to change the terms of the contract. However, disputes over the agreement of a lump-sum turnkey price are thought to have delayed the formal signing of the new deal. A source close to the project says the scheme is moving more slowly than expected as it continues on a cost-reimbursable basis. An Aramco spokesman says the project will still be completed on schedule by the end of 2007. Bechtel and Technip were unavailable for comment. Package two, the gas processing component of the 500,000-barrel-a-day field, was one of the first to be awarded by Aramco on a convertible lump-sum turnkey basis in 2005 (MEED 15:6:07). Under the original plan, conversion was expected to take place once 50-60 per cent of the engineering had been completed. About 75 per cent of the project is understood to have reached that stage.This content is only available to full MEED package subscribers (MEED magazine and MEED.com).
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