The local National Petroleum Construction Company (NPCC) has been formally awarded a $683m contract to increase production at the onshore Bab oilfield in Abu Dhabi, according to sources close to the company.

The engineering, procurement and construction contract was signed on 16 February at the headquarters of the client, Abu Dhabi Company for Offshore Operations (Adco).

It covers the construction of oil and gas production facilities at the Bab field as part of a wider scheme to boost the emirate’s oil production by 400,000 barrels a day (b/d).

Abu Dhabi currently produces 1.4 million b/d of oil from its onshore oil fields and aims to boost this to 1.8 million by 2015, by increasing production at the Bab, Bida Al-Qemzan and Qusawirah fields.

NPCC will boost production at Bab, 150 kilometres south of Abu Dhabi, by developing the Habshan-2 and Thamama-G reservoir over a 30-month period under the contract.

Adco sent letters telling NPCC that it had won the contracts to develop the Bab and Qusawirah fields in December, but subsequently pushed the company to offer lower prices on both deals.

The local engineering firm had submitted the lowest bids for both contracts in a November 2009 bid round.

Negotiations are continuing over the Qusawirah contract, according to sources close to the deal.

US/Canadian firm Veco won the $300m engineering and procurement contract to develop the Bida al-Qemzan field in late January. The company will complete detailed engineering design work and order the necessary equipment before appointing a construction contractor on the project.