Zadco launches offshore island drilling tenders

01 February 2011

Construction of main artificial island almost complete

Abu Dhabi’s Zakum Development Company (Zadco) has launched tenders for a series of major drilling deals at the offshore Upper Zakum oil field as part of its plan to increase production by 20 per cent.

The ‘big four’ US-based oilfield services companies Weatherford, Baker Hughes, Halliburton and Schlumberger, as well as two local firms are all preparing to bid for the deals by the end of February.

The drilling deals have been broken down into six contracts. The winning firm will carry out drilling services for Zadco on a three-year contract, with the option of two further one year extensions.

Zadco is building four offshore islands, as opposed to traditional steel platforms, to act as both drilling rigs and facilities sites in a bid to save at least 20 per cent in costs.

The islands will be built at depths ranging from 6 metres to 14 metres and covering a total area of 2.6km by 2km.

The local National Marine Dredging Company (NMDC) won the $626m contract for the construction of four artificial islands to house drilling platforms and supporting infrastructure in November 2009. Construction is expected to be completed by the end of 2012.

The construction of the main South Island is almost complete. Early civil works will be finished by October 2011, but work on the other three islands is yet to begin.

“Work will begin with the small South Island. Zadco expects drilling operations to start by January next year, but this is looking doubtful,” says a source.

The next move will be to select international engineering firms to build two phases of production facilities and pipelines connecting the islands with central onshore facilities. Awards are planned for October 2011.

France’s Technip is currently carrying out the front-end engineering and design (feed) for the oil facilities and pipelines, which has been subject to numerous revisions. Scheduled for completion in January, the feed is now expected to be completed by the end of March (MEED 10:12:10).

The offshore oil and gas developer plans to increase oil production at the Upper Zakum field to 750,000 barrels a day (b/d) by 2015, costing an estimated $15bn, from current levels of about 500,000 b/d. Zadco hopes to maintain this plateau level for up to 25 years, recovering 70 per cent of the oil in the field.

Abu Dhabi relies on offshore oil and gas fields for about 20 per cent of its hydrocarbons output, but it has not developed a major new field away from the mainland since it started production at the Zakum field in 1966, due to the relative expense and technical complexity of development.

Zadco is a joint venture of state-owned Abu Dhabi National Oil Company, US oil major ExxonMobil and Japan Oil Development Company.

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