Adnoc awards $744m offshore field development contract to NPCC

The Belbazem block is being developed to reach a production capacity of 45,000 bpd with the first barrel of oil expected in 2023

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Abu Dhabi National Oil Company awarded a $744 million (Dh2.73 billion) contract to the UAE's National Petroleum Construction Company to fully develop the offshore Belbazem block.

Adnoc subsidiary Al Yasat, which is the state-owned oil company's joint venture with China National Petroleum Corporation, awarded the engineering, procurement and construction contract.

The Belbazem block is being developed to reach a production capacity of 45,000 barrels per day of light crude, with the first barrel of oil expected in 2023. The development is part of Adnoc's efforts to raise its production capacity to 5 million bpd by 2030.

The offshore block consists of three fields –Belbazem, Umm Al Salsal and Umm Al Dholou.

Adnoc has the majority 60 per cent stake in Al Yasat, with the remainder held by China’s CNPC.

"NPCC was selected after a rigorous tender process that ensures it will deploy best-in-class technology and expertise to execute this strategic project, with a substantial part of the award value flowing back into the UAE’s economy," said Yaser Almazrouei, Adnoc upstream executive director said in a statement on Tuesday.

Around 65 per cent of the award value will flow back to the UAE, according to Adnoc's in-country value programme.

The Belbazem block, which lies 120 kilometres northwest of Abu Dhabi city, is also expected to produce 27 million cubic feet per day of associated gas by 2023.

Ahead of the EPC award, Al Yasat undertook a front-end engineering and design competition in order to optimise the cost and time efficiencies of the project.

The company was able to reduce the tender time by up to 12 months after eliminating the need for technical bids. Al Yasat Petroleum saved about $190m in capital expenditure with the shortening of the tendering process, Adnoc said.

"The Feed competition and EPC award for the Belbazem offshore block highlight Al Yasat’s focus on costs and competitive approach to ensure we can commercially develop our concession areas and deliver long-term and sustainable value for Adnoc and our partner CNPC," said Al Yasat acting chief executive Shaheen Al Mansoori.

NPCC's scope of work includes installing three offshore wellhead towers, one in each of the three fields. Laying interconnecting subsea pipelines and cables to Zirku Island, located 60km from Belbazem field, are also part of the scope.

NPCC is also required to undertake the development of greenfield facilities for water injection, produced water treatment, gas compression, associated utilities as well as brownfield works for tie-in to existing facilities at Zirku Island.

On Monday, Adnoc announced the development of a massive blue ammonia project at its downstream hub in Ruwais, as it looks to grow the UAE's hydrogen economy.

The company is advancing the design phase of the planned facility at the Ta'ziz industrial ecosystem, which is being developed with ADQ at Ruwais.

The facility will have a capacity to produce 1,000 kilotonnes of ammonia per year, Adnoc said in a statement.