Saudi Aramco reviews bids for Safaniyah work

27 January 2010

Infrastructure contract estimated to be worth $1bn

Energy giant Saudi Aramco is reviewing bids from international engineering firms for an estimated $1bn worth of infrastructure work at its offshore Safaniyah field, according to sources close to the project.

Three contractors submitted bids to Aramco for the engineering, procurement and construction (EPC) deal on 11 January. The winner will build two new offshore platforms, while modifying a further nine and building pipelines.

Aramco plans to award the contract before the end of March 2010, according to an executive at one of the bidding firms, although the Saudi firm may first hold direct talks with contractors to try and get the best price for the job.

The contract includes the supply and installation of a significant number of undersea electrical cables, worth about $250m. However, Aramco is considering separating this work from the main contract and issuing a separate tender for it, according to one engineering executive with knowledge of the project.

The remaining infrastructure work is worth about $750m, according to another source close to the scheme.

The contractors that submitted bids earlier this month were the US’ J Ray McDermott, Italy’s Saipem and the UAE’s National Petroleum Construction Company (NPCC). The US and Italian contractors are the frontrunners to win the deal, according to sources close to the scheme.

The Safaniyah field is the largest offshore oil field in the world and the third-largest oil field overall, according to the US’ Energy Information Administration.

Aramco currently produces about 1.2 million barrels a day (b/d) of oil from the field, although it could produce up to 1.9 million b/d if required, said Saudi Arabia’s Energy Minister Ali al-Naimi said in 2008.

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