Carillion joint venture in Oman wins Dh456 million BP contract

Above, the Khazzan gasfield, which is about 350 kilometres southwest of Muscat. Courtesy BP

Carillion, the British construction services firm, says its joint venture in Oman has won a contract worth £80 million (Dh456m) from BP for the Khazzan gas project.

The contract involves building accommodation for about 250 workers, alongside the operational base and other infrastructure buildings at the Khazzan gasfield, which is about 350 kilometres south-west of Muscat.

Work on the contract is expected to start in September and is scheduled for completion in mid-2017.

“We are delighted … and we look forward to working with BP in Oman,” said Richard Howson, Carillion’s chief executive.

The Khazzan gasfield is one of the world’s biggest. BP is developing it under a 30-year deal worth US$16 billion that it signed with Oman’s government in 2013.

Last year, BP awarded a $2bn contract to Jacobs Engineering Group for process and infrastructure work on the Khazzan gas project, and a $1.2bn deal with Petrofac to build a central processing facility.

Carillon operates under a series of joint ventures in the Middle East. In Oman it operates as Carillon Alawi and in the UAE as Al Futtaim Carillion.

Carillion, which made a profit of £142.6m on revenues of £4.1bn last year, said it was expecting revenues for its Middle East construction services division to “increase substantially” during the first half of the year.

“Over the medium term, we continue to expect further growth, driven by growing investment in construction in a number of our markets,” it said.

“Dubai is planning major investment, much of which is expected to support its role as host to Expo 2020, including building a second airport to cater for over 100 million passengers a year, broadly doubling its current hotel accommodation and the construction of new commercial, retail and leisure facilities.”

Carillion was the first contractor to be awarded a loan from UK Export Finance, a government agency set up to provide trade finance, last year when it secured a £34m loan to fund its work on the Dubai World Trade Centre district project.

The company expects its ability to use government funding to help finance overseas contracts will provide it with more opportunities in the region.

Carillion shares rose 1.14 per cent to 355.7 pence by noon in London on Tuesday.

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