Aramco gives joint ventures more time

23 October 2009

Contractors gain extension on bidding process for five-year deals

State-run oil company Saudi Aramco has delayed the bidding process for contractors competing for its lucrative five-year engineering deals, after bidders asked for more time to set up joint ventures with local firms.

The national oil company originally asked joint venture groups to prequalify for the deals by 1 November and to prepare for contract awards in the first quarter of 2010.

However, two sources close to the project say Aramco has now extended the prequalification deadline until 2 January, with an award due in the second quarter of 2010.

Under Saudi Aramco’s spending plan for 2010 to 2014, the state-run energy giant aims to offer all the major contracts on its megaprojects to joint ventures of international companies and local firms.

One Al-Khobar-based executive says that international companies have taken longer “locking down” deals with local companies than expected. “The major contractors just need more time to get their ventures in place before bidding,” says the executive.

Foster Wheeler, Mustang Engineering, Fluor, Jacobs, Bechtel and KBR of the US, Australia’s WorleyParsons, France’s Technip, and Canada’s SNC Lavalin are expected to bid.

The engineering services contracts cover feasibility studies, front-end engineering and design work, project management support and contract management.

Aramco plans to award five separate deals, each for 10 million man hours of work.

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