Kuwait Oil Company awards $8.6bn in 2014

02 February 2015

Contract awards see a 95 per cent increase

State upstream operator, Kuwait Oil Company (KOC) awarded $8.57bn in contracts in 2014, a 95 per cent increase on the previous year, which saw just $4.39bn awarded.

A total of 157 contracts were signed for a range of products, from engineering, procurement and construction (EPC) services, to renting oil drilling rigs, consultancy and maintenance fees, vehicle rental and stationary supplies.

The dramatic increase in the value of contracts being awarded comes amid a push to ramp up oil production in Kuwait.

In May 2013, KOC set a target of raising its oil production from about 3 million barrels a day (b/d) to 3.7 million b/d by 2020.

The biggest contract of the year was signed on 14 September with the Dubai-based contractor Dodsal Engineering and Construction.

The deal was to construct an effluent water treatment and injection plant to boost crude production from northern Kuwait and had a value of $948m.

KOC’s second-biggest contract of 2014 was to construct Gathering Centre 30 in northern Kuwait. It was won by India’s Larson & Toubro (L&T), which signed a contract worth $810m.

The deal won by L&T was one of three gathering centre contracts signed in July that had a total value of $2.3bn. UK-based Petrofac and Dodsal were awarded the other two contracts.

Kuwait’s oil fields are connected to 26 gathering centres, which serve as a collection location for crude produced at several wells connected by flowlines, providing initial treatment through the separation of associated gas and removal of salt.

The three gathering centre contracts helped make July the biggest month for KOC awards, with a total of $2.6bn awarded.

The quietest month for contract awards was February, which saw just four contracts awarded, with a total value of just $9.3m.

Other significant awards include a $700m deal signed on 21 September with China’s Sinopec International Petroleum Services Corporation for the supply of nine 1,500HP drilling rigs.

Not all the big-ticket contracts were signed with foreign firms. Kuwait-based Combined Group Contracting Company (CGCC) signed a $278m deal in August to construct flowlines and associated works in northern Kuwait.

This year has already seen a $4.16bn KOC contract to develop the Lower Fars heavy oil fields awarded to Petrofac and a total of $5.9bn is expected to be awarded over the year, according regional projects tracker MEED Projects, which tracks EPC contracts worth more than $50m.

Among the significant KOC awards expected in coming months is a contract to build a new gathering centre in southeast Kuwait, near the giant Burgan field.

Gathering Centre 32 is expected to have a contract value of up to $1bn. Front-end engineering and design (feed) work was completed before the end of 2014 and the main contract tenders are expected to be issued in the first quarter.

Follow Wil Crisp on Twitter: @bilgribs

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