The contract will involve construction of collection and treatment facilities for ROD and five satellite fields within the two blocks and the building of gas and water re-injection facilities to maintain the pressure of the wells. The one-train treatment plant will be built at the existing BRN production facility located in block 403. From there, the oil will be transported via the existing pipeline infrastructure to the export terminals at Skikda and Arzew. The construction work is scheduled to take 24 months to complete.

The field is operated by Australia’s BHP Billiton, under a production sharing agreement (PSC) with state energy company Sonatrach. BHP Billiton has a 45 per cent interest in the blocks. The remaining 55 per cent is held by Agip, which acquired the stake from Anadarko Petroleum Corporation of the US, Maersk Oil & Gas of Denmark and the UK’s Lasmo, which is now wholly owned by Agip’s parent company, Italy’s Eni(MEED 23:7:99).

Estimated reserves in the six fields are 299 million barrels – BHP Billiton’s entitlement under the PSC is approximately 65 million barrels – and gross peak production is expected at 80,000 barrels a day (b/d). The foreign partners will not have access to the estimated 170 million cubic feet a day of associated gas expected to be produced, other than for use as fuel gas on site.

The capital cost of the project is put at $500 million and the development is scheduled to come on stream in 2004. The date for first production has been set back from the first half of 2003 after BHP Billiton was granted a one-year extension to the exploration licence in order to complete its appraisal and commercialisation of the permit’s reserves.

Three other international firms bid for the EPC contract. They were: JGC Corporationof Japan, which submitted an offer price of $273 million; ABBof Switzerland which bid $283 million; and Italy’s Snamprogettiwhich proposed a price of $309 million.