Dubai Petroleum tenders offshore oil construction deal

27 April 2010

State producer wants to produce oil from the offshore Al-Jaila field

State oil producer Dubai Petroleum Enterprises has invited international engineering companies to bid on a deal to build production facilities at the newly-discovered offshore Al-Jaila oilfield.

Sources close to the project say the company issued bid documents for the engineering, procurement, installation and commissioning (EPIC) contract during the week ended 15 April.

It covers the construction of a basic unmanned offshore production platform with a single compressor unit and about 12 kilometres of flowlines to transport oil produced at the field to Dubai Petroleum’s onshore processing and distribution facilities.

Engineering executives with knowledge of the project value the contract at about $50-100m.

Contractors approached by Dubai Petroleum are understood to include Paris-based Technip, Jebel Ali-based J Ray McDermott, and Abu Dhabi-based National Petroleum Construction Company.

Dubai announced the discovery of the new field on 4 February. The discovery was made to the east of the existing Rashid field, Dubai’s ruler Sheikh Mohamed bin Rashid al-Maktoum said in a statement at the time. The ruler’s office declined to comment on the size of the new field, potential output or a timeline for its development.

Oil accounted for 2.1 per cent of Dubai’s gross domestic product in 2008, with the sector accounting for AED6.6bn ($1.7bn) of economic output during a year when oil prices hit record highs, according to official figures. The emirate’s oil production is no more than 50,000 barrels a day (b/d), senior industry sources tell MEED.

Analysts remain cynical over the potential of the new discovery, given that production at existing oilfields has already peaked. Production at the Fateh, South Fateh, Falah and Rashid fields started in the 1970s and 1980s, but overall output peaked at around 400,000 b/d in the early 1990s.

Until 2007, when Dubai Petroleum took over the emirate’s oil production, the industry was overseen by a consortium led by the US’ ConocoPhillips. Figures released by the consortium after it was disbanded suggested that overall output was around 65,000-80,000 barrels a day (b/d), although production was in rapid decline at the time.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications