Saudi Aramco seeks new contractors for offshore projects workload

15 February 2017

Large volume of work forecast for offshore upgrades and field developments over next two years

Saudi Aramco is looking for additional companies to join its Long-Term Agreement (LTA) programme to carry out projects on its offshore oil and gas fields, according to several industry sources based in Saudi Arabia.

The current LTA gives five international engineering companies exclusive rights to bid for offshore work in the kingdom, but Aramco estimates that it will need additional contractors due to the large volume of work to be tendered over the coming years.

The LTA deal was initially signed in 2015 with four groups including the US-based Dynamic Industries, a joint venture of India’s Larsen & Toubro and Singapore’s Emas, US-based McDermott, and Italy’s Saipem. Abu Dhabi-based National Petroleum Construction Company (NPCC) became the fifth LTA contractor on 13 October 2016.

Aramco is thought to have requested a number of additional companies to submit prequalification documents to be added to the LTA as either main contractors or sub-contractors.

Norway’s Aker Solutions, UAE-based Lamprell, London-headquartered SubSea 7 and France’s Technip are understood to be among the companies invited to enter the prequalification process.

The process for the initial contractors to enter the LTA took over six months. If new companies undergo the same checks it is unlikely they will be able to bid for tenders under the LTA until the second half of 2017.

“Aramco is trying to bring in new contractors because they are forecasting so much work that they do not think the existing companies have enough capacity to handle it,” said an industry source.

“Some of the existing LTA contractors already have their hands full from work awarded in the last 18 months,” a second source told MEED.

The LTA gives international contractors rights to bid for several oil-and-gas-producing platforms, tie-in platforms, pipelines, power cables and related facilities under Aramco’s masterplan for its offshore fields.

However, at least two major oil and gas field developments currently in the planning phase are also expected to be offered for LTA contractors to bid on.

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