Following extensive technical clarifications throughout the year, PDO is understood to have opted for “desert greening” technology.

It will use the treated effluent water from oil production to grow biofuel crops in the desert.

Only a few companies are believed to have been technically prequalified for the design, build, ownership and operation contract to develop an effluent water treatment and biofuel system. They include the UK/Dutch Shell Group, France’s Veolia and AES Arabia.

The winner will take 45,000 cubic metres a day of water from the field, treat it and use it to grow crops suitable for biodiesel production, the first time such a scheme has been attempted in the Middle East.

The treatment and disposal of water is a major issue for PDO.

At some of its mature fields, the company produces five barrels of water for every barrel of oil, compared with the industry standard of three to one.

If the project proves to be a success, it is a system that could be replicated throughout the Middle East, as nearly every major national oil company in the region is struggling to deal with increasing water cuts.