At least six international engineering firms are preparing final bids for the contract to manage two projects to boost Abu Dhabi’s onshore oil production capacity.

The project management consultancy deal covers engineering work to increase production at the Bab and Qusahwirah fields.

State-run Abu Dhabi Company for Onshore Operations (Adco) has set a 25 August deadline for the commercial bids, according to executives at companies competing for the work.

The firms submitted technical bids to Adco on 28 July setting out how they would manage the projects. The executives expect Adco to name the winning contractor by the end of September.

Abu Dhabi oil production growth, 1998 2008
Year % change, year on year
1998 2.88
1999 -5.26
2000 4.38
2001 -3.63
2002 -9.04
2003 10.99
2004 1.69
2005 3.52
2006 7.34
2007 -1.57
2008 1.85
Source: BP  

Adco has invited the US’ Fluor Corporation, the US/Canadian Veco, the UK’s Amec and Mott MacDonald, and Australia’s WorleyParsons to bid for the contract.

The projects at Bab and Qusahwirah are part of a wider scheme, know as the ‘1.8 million project’, to increase the emirate’s onshore oil production from 1.4 million barrels a day (b/d) to 1.8 million b/d by 2019. Adco has yet to disclose how much extra oil it wants each field to produce.

The state oil company cancelled two bid rounds for the contract in 2008 because it was not satisfied with the prices on offer. The original deal also covered the management of construction work to boost capacity at two other fields: Bida el-Qemzan and Ruwais.

Adco put the planned works at Ruwais on hold in February and decided to tender Bida el-Qemzan separately to cut costs.

Because of the reduced scope of the projects and the contractors’ familiarity with the work following two unsuccessful tenders, Adco should find it relatively easy to work out prices for the contract this time around, according to the business development manager at one of the bidding firms.

“It is not a huge deal,” he says. “Adco should be able to push it through pretty quickly. It is really keen to run ahead with projects [to expand capacity], as are all the national oil companies in the UAE. They want to get the best of the perceived fall in costs for projects.”

However, executives at companies bidding for the contract covering engineering, procurement and construction (EPC) work at the Qusahwirah field say the pace at which Abu Dhabi is tendering work is causing them problems.

After being granted an extension to their technical bid deadlines for the deal from 27 July to 25 August, the executives say they still need more time.

“We have been so busy recently that getting this tender done has been really hard,” says a senior engineer at one firm. “It is a pretty big deal, so it is important that we get this right.”

The emirate plans to award contracts for five multi-billion-dollar oil and gas schemes in 2009, leading many contractors to describe the local project market as overheated.