Aramco extends bid deadline for long-term offshore deal

07 October 2014

Contractors will have until November to submit bids

Saudi Aramco has extended the deadline until the end of November for the long-term contract it is planning to award to four engineering, procurement and construction (EPC) contractors.

The initial deadline was 30 October, but contractors will be given more time to formulate bids for the deal, which will cover EPC work on the state-owned oil major’s offshore oil and gas facilities.

“The bidders have asked for more time, so Aramco has agreed to extend the deadline,” says an oil and gas source based in the kingdom. “This is a complicated deal and potentially very important, so no one wants to rush the bids.”

The US’ McDermott and Italy’s Saipem are the signatories of the current long-term contract, which will expire in 2015.

Aramco expects to ramp up its offshore maintenance and rebuilding programme over the next five years and wants to work with four EPC contractors. The contract will last for five years, with the option of a three-year extension.

The bidders include:

Aramco will want a pool of contractors because it feels two are not enough to ensure a proper bidding process for each piece of work. The company does not like to award on a single-source basis for any of its operations.

The contract will run alongside the Maintain Potential Programme (MPP), which is Aramco’s long-term contract for engineering, design and project management of its offshore operations.

Like the EPC contract, the new MPP contract is going to be much broader in scope and is likely to involve more than one company. Aramco is considering a strategy for the MPP that would involve two engineering firms sharing a broader project management consultancy (PMC) contract. Bids for the MPP are now under evaluation.

Aramco has extensive offshore operations on the kingdom’s Gulf coast, including Safaniya, the world’s largest offshore oil field, and several large non-associated gas fields.

Many of the fields are mature and likely to require extensive rehabilitations over the next decade to maintain production. Hundreds of new wells need to be drilled every year to maintain operations in shallow-water fields.

The oil major is also carrying out seismic surveys on the Red Sea coast, although any potential production is still expected to be several years away.

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