State oil company changes scheme to lower costs
Kuwait Oil Company (KOC) plans to retender a $700m-plus deal to build seawater injection facilities at the company’s northern and central oilfields in December, say contractors hoping to bid for the deal.
The country’s national oil company originally tendered the contract in 2008.
KOC cancelled the bid round after the lowest price, from Italy’s Snamprogetti, came in significantly above its budget, at KD320m ($1.1bn) (MEED 29:5:09).
Contractors talking to KOC about the deal say that the company has changed the scope of the contract since the first tender in 2008 in an attempt to reduce the cost of the project. The contractors did not know what KOC had changed.
Under the first tender, the winning bidder would have expanded three oil and gas gathering centres and the pipelines linking them, developed an existing seawater treatment plant at Subiya, and enlarged the injection facilities at the Sabriya and Raudhatain oil fields.
KOC prequalified 10 international firms to bid for the 2008 tender: South Korea’s Daelim Industrial Company, GS Engineering & Construction Corporation, Hyundai Heavy Industries, and SK Engineering & Construction, the US’ Foster Wheeler, Japan’s JGC Corporation, the UK’s Petrofac, Italy’s Snamprogetti, France’s Technip, and Spain’s Tecnicas Reunidas.
Senior executives at the firms say that the retender has excited them after a fallow period for major contracts in the country.
“It’s a huge contract relative to what has been on offer lately, and like everyone else we will be pushing hard to get it,” says the business development manager of one firm.