Several people familiar with the development — a key component in the emirate's ambitious plans to increase output — told Upstream bids have been submitted for the much-delayed offshore project that involves the first phase of the Umm Shaif long-term development project (LTDP-1).
Those who submitted commercial offers to Adnoc for the Umm Shaif LTDP-1 project and remain in the running include Abu Dhabi’s National Petroleum Construction Company (NPCC) and a grouping led by Indian engineering giant Larsen & Toubro (L&T) with Italy’s Saipem, one well-placed source said.
Abu Dhabi is performing multiple greenfield and brownfield developments aimed at ramping up its oil production capacity to 5 million barrels per day by 2030, up from 4 million bpd.
Some of the key offshore oilfields in Abu Dhabi including — Upper Zakum, Lower Zakum, Umm Shaif and Belbazem — are likely to play a crucial role in its plans.
Adnoc is carrying out capacity expansion projects at each of these fields, but some projects are still thought to be in the initial engineering phase, Upstream understands.
Adnoc is yet to respond to an Upstream query on the latest developments involving the Umm Shaif expansion project.
The tender process for the prized offshore contract was floated by Adnoc last year but submission of commercial bids was delayed on several occasions in the wake of uncertain market conditions.
However, the offshore EPC tender recently gained momentum in the wake of sustained higher crude oil prices and improved market fundamentals.
Bid evaluation in progress
Adnoc is evaluating the offers for the US LTDP-1 project and is expected to arrive at a decision within months, market sources said.
However, another source noted that Adnoc might aim at a further optimisation for the job that could lead to renewed delays on the tendering front.
An Adnoc spokesperson recently told Upstream the company remains committed to "responsibly progressing the development of Umm Shaif field to maximise value" for the United Arab Emirates and concession partners.
“We are focused on delivering on strategic mandates and production objectives, and we are not driven by EPC award timelines or market speculation. We will share news on EPC awards in due course,” the spokesperson said.
Those said to have initially submitted technical offers included Abu Dhabi’s NPCC, a pairing of UK’s Petrofac with Sapura and a third group led by L&T with Italy’s Saipem.
However, Petrofac dropped out from the tender race, as the UK-based contractor was suspended from participating in new Adnoc tenders after a former company executive in January pleaded guilty to bribery offences involving oil deals worth over $3 billion in the UAE.
Following Petrofac’s exit, its partner Sapura Energy also made an exit from the LTDP-1 tender, leaving the two other contenders in the fray.
Sustaining production
Abu Dhabi’s Supreme Petroleum Council recently approved Adnoc’s capital expenditure budget of 448 billion dirhams (US$122 billion) from 2021 to 2025, which includes several oil-based projects.
The Umm Shaif LTDP-1 project aims to sustain oil production from the offshore field until 2028 and is a key part of the emirate’s strategy to achieve its output capacity growth target.
Umm Shaif is producing around 275,000 bpd and the project will sustain plateau oil production from 2024 to 2028, project watchers said.
The project’s contractual workscope includes the removal of bottlenecks at the oilfield's facilities and is expected to be completed by the end of 2023.
The successful contractor will also be responsible for the EPC of five new wellhead towers — 12B, 19B, 142A, 153A and 159A.
Also included are subsea pipelines and cables, a new riser platform (RP-1), modifications to wellhead towers, tie-ins and the provision of associated facilities.
Three wellhead towers — HP-1, HP-2 and HP-3 — each with 12 slots and associated facilities also form part of the work on offer.
Adnoc is also expected to initiate work within a year or two on the multi-billion-dollar second phase of the Umm Shaif long-term development project.
This programme is intended to boost oil production capacity at the field to as much as 360,000 bpd on a long-term basis.
French giant TotalEnergies, state-owned PetroChina and Italy’s Eni hold a combined 40% stake in the new Umm Shaif and Nasr concession, with the majority stake of 60% held by Adnoc.