Occidental retenders Oman crude stabilisation contract

31 March 2010

Design changes could cut costs by up to 20 per cent

Occidental Mukhaizna, a subsidiary of the US’ Occidental Petroleum, has retendered the estimated $80m contract to build a new crude oil stabilisation plant in Oman after making cost-saving changes to the scope of the project, sources close the development tell MEED.

The project covers the construction of facilities to maintain reservoir pressure and production levels at the Mukhaizna oil field, which Occidental is developing. The engineering, procurement and construction (EPC) deal covers the construction of new oil handling trains, storage tanks, compressors, water separation facilities, and a series of new pipelines.

The project was first tendered in mid-2009, and Occidental completed a series of discussions with bidders over the technical details of the project in early February, telling them that it expected to award the contract by early March (MEED 14:2:10).

However, the company has since reworked the front end engineering and design (Feed) study for the project, and has cut out a series of six-inch pipelines and pumps from its original plans.

The changes will cut the cost of the scheme, previously valued at around $80-100m, by up to 20 per cent, one senior source with knowledge of the project tells MEED.

Occidental has asked contractors bidding on the deal to submit new technical and commercial proposals by 30 March although a number of firms want to push the deadline back to 14 April, sources say.

Firms bidding on the contract include the local Al-Hassan Engineering, Arabian Industries, Galfar Engineering & Contracting, Gulf Petrochemical Services and Trading, and Special Technical Services.

It is just one of a series of projects under development in Oman to increase hydrocarbons production using enhanced oil recovery techniques. Output from the country’s ageing oilfields peaked in 1997 when it produced 909,000 barrels a day (b/d) of oil. Oman produced 728,000 b/d in 2008, according to the UK’s BP.

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