A drilling project with artificial islands poised atop one of the world's biggest oilfields is progressing, with a US$3.7 billion (Dh13.5bn) contract announced yesterday.
Daewoo Shipbuilding & Marine Engineering and Petrofac Emirates, a joint venture between Petrofac and Abu Dhabi's Mubadala Petroleum, won the deal to engineer and build facilities for four islands at the Upper Zakum field off the coast of Abu Dhabi.
Petrofac Emirates's share of the contract is valued at $2.9bn.
Upper Zakum is a cornerstone of Abu Dhabi's plans to increase oil production from 2.8 million to 3.5 million barrels per day (bpd). Zakum Upper Development Company, a joint venture among Abu Dhabi National Oil Company, Japan Oil Development Company and ExxonMobil, is expected to contribute 750,000 bpd of the total.
"This project builds on the substantial work we have under way in the UAE," Subramanian Sarma, Petrofac's managing director for onshore engineering and construction, said in a release. "We look forward to developing our relationship with Zadco through the successful delivery of this strategically important project."
Upper Zakum is also a test of how far Abu Dhabi can push its drilling capabilities. ExxonMobil, which joined the project in 2005 with a 28 per cent stake, is to use the artificial islands as bases for horizontal drills, which will branch out to corners of a field estimated to contain 16 billion barrels of oil. The goal is to recover 70 per cent of that, twice the industry norm. For ExxonMobil, which is competing alongside the other international majors and Asian national oil companies for a slice of lucrative onshore concessions that come up for renewal next year, the Upper Zakum project is a crucial skills demonstration.
The drills on the islands will eliminate the need for 90 wellhead towers scattered across the offshore area 84 kilometres north-west of the capital.
Abu Dhabi Marine Operating Company, the emirate's offshore operator, is replicating the artificial island technology at the Satah Al Rasboot field, the first to be developed by the emirate without a foreign partner to share the risk and capital cost.
Daewoo and Petrofac Emirates are to engineer, supply and commission wellhead controls, facilities to process crude, export pumps and other core machinery on the islands. The work is scheduled for completion in 2016.
Yesterday shares of Petrofac in London were up 1.12 per cent to 1,446 pence.
