Zadco to award dredging work at Zakum

23 October 2009

Oil firm plans to create four man-made islands under scheme to increase production at offshore field

Abu Dhabi’s Zakum Development Company (Zadco) plans to award the dredging contract by the end of October for its estimated $15bn scheme to increase production capacity at the offshore Upper Zakum oil field.

Zadco already produces up to 500,000 barrels a day (b/d) at the field, which the company says is the world’s fourth-largest offshore oil reservoir, but wants to increase its capacity to 750,000 b/d by 2015.

To achieve this, Zadco will create four man-made islands at the field, which it will use as drilling platforms and to house infrastructure and utilities.

Sources close to the scheme say it will make an award for the dredging works to create the islands, in depths of up to 12 metres, by the end of this month. Abu Dhabi National Oil Company (Adnoc), which holds a 60 per cent stake in Zadco, is overseeing the contract to create the islands.

“Once the dredging works have been awarded and started, it can push ahead with building the drilling and production facilities,” says the business development manager of one contractor considering bidding for work on the scheme.

Zadco will tender the drilling and production facilities work in two phases. In the first, it will ask contractors to build early production facilities on the islands to increase production capacity by 50,000-100,000 b/d.

Zadco will issue a tender for the engineering, procurement and construction (EPC) contract for this part of the scheme in the first quarter of 2010. The company plans to award a contract for the work in the third quarter of the year, said Salah al-Bufalah, Zadco’s major projects manager, at the MEED EPC 2009 conference in Abu Dhabi on 20 October.

One source close to the scheme says Zadco will ask international engineering design firms to express interest in the front-end engineering and design (Feed) contract for the second phase of the project in October.

The second phase covers the design of permanent facilities on the islands. The company will award an EPC deal for the second phase in the fourth quarter of 2012.

Senior executives at Zadco originally wanted to use 23 platforms to drill about 300 oil wells to increase production at the reservoir. This would have cost an estimated $18bn, said Al-Bufalah.

The decision to use artificial islands will cut the cost of the development by 20-30 per cent,
he added.

One source close to the dev-elopment tells MEED Zadco has valued the entire project at about $15bn. The company originally wanted to create seven islands, but has since cut the number to four.

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