ADNOC awards artificial island contract

Abu Dhabi National Oil Company awards a Dh2.3 billion contract to National Marine Dredging as part of a project to build artificial islands in the Gulf.

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Abu Dhabi National Oil Company (ADNOC) has awarded a Dh2.3 billion (US$639 million) contract to National Marine Dredging as part of a project to build artificial islands in the Gulf. But these islands will support drilling rigs, not mansions. "This project is one part of Zadco's plans to advance petroleum operations at the Zakum field to increase oil production," said Mohammed al Rumaithi, the chief executive of National Marine, which is 40 per cent owned by the Abu Dhabi Government.

Zadco is the Zakum Development Company, the ADNOC unit in charge of developing the Upper Zakum oilfield, which is one of the largest in the Gulf. On Tuesday, Frank Kemnetz, the president of two ExxonMobil subsidiaries operating in the Gulf, told an Abu Dhabi conference Zadco would seek to cut costs by building four islands for drilling, instead of using platforms. ExxonMobil, the US oil company, holds a 28 per cent interest in Zadco, which has a 20-year concession to develop the Lower Zakum field that expires in 2026.

Mr Kemnetz said Zadco sought to raise the field's production to 750,000 barrels per day (bpd) by 2015, representing a 50 per cent rise from 500,000 bpd when the concession began three years ago. National Marine's contract is the largest for dredging work in the Emirates since the credit crisis ended the nation's property boom. The company, which was once ADNOC's dredging division and now has its shares listed on the Abu Dhabi Securities Exchange, is best known for recent work on developing the capital's corniche and Sir Bani Yas Island off the coast of the capital. National Marine has not suffered from the property downturn that upset plans for several luxury property developments in Dubai involving artificial islands and rivers. Yesterday, the company posted a third-quarter net profit of Dh237.7m, up 34 per cent from Dh176.9m a year earlier. It said it was executing a number of big industrial projects off the coasts of Abu Dhabi and Fujairah. ADNOC has announced plans to add nearly 800,000 bpd of new oil production capacity in the next few years, including 550,000 bpd from oilfields in the Gulf. It plans to raise crude output to 3.5 million bpd by 2018 or 2019. This year, due to reduced OPEC quotas, the UAE has been pumping about 2.2 million bpd of crude, of which ADNOC supplies more than 90 per cent. The UAE's oil production capacity is believed to be about 2.85 million bpd.