A consortium of the UK-based Petrofac and South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) has emerged as the frontrunner to win a major deal on the development of the offshore Upper Zakum field in Abu Dhabi.
Project owner Zakum Development Company (Zadco) asked contractors to re-submit commercial engineering, procurement and construction (EPC) bids in late December after budgetary changes.
The Petrofac-DSME team submitted the lowest bid of $3.79bn for the contract, known as EPC 2, to build an oil processing plant and associated facilities, according to sources close to the bidding process.
The second-lowest bid of $3.85bn was submitted by a consortium of South Korea’s Hyundai Heavy Industries (HHI) and US-based KBR. The other bids were led by Japan’s JGC Corporation, South Korean group Samsung Engineering and France-based Technip.
The contract, which is expected to be awarded later in the first quarter, is part of Zadco’s plans to increase the Upper Zakum field’s capacity to 750,000 barrels a day (b/d) from 500,000 b/d.
Contractors originally submitted commercial proposals for the contract in September 2012, with HHI and Samsung Engineering the lowest bidders.
Zadco awarded the $800m EPC 1 first Upper Zakum package – covering the offshore section of the development – to a consortium of Technip and UAE-based National Petroleum Construction Company (NPCC) in July 2012.
The two main early production facilities contracts cover phase one of the development of Upper Zakum, which is planned to add 100,000 tonnes a year (t/y) to the field’s production capacity by the end of 2015. Packages for the phase two permanent production facilities are expected to be tendered at a later date.
The Upper Zakum field, which Zadco believes is the world’s fourth largest, is located 84 kilometres off the coast of Abu Dhabi.
Zadco is a joint venture of state-owned Abu Dhabi National Oil Company (Adnoc), US-based oil major ExxonMobil and Japan Oil Development Company (Jodco).