Abu Dhabi has awarded a delayed, key $3.7bn engineering contract which is part of a plan to boost crude production capacity of its 500,000 b/d offshore Upper Zakum field to 750,000 b/d. Bids were received in the first half of 2012. The first phase expansion was originally scheduled for 2015, but is now more likely in 2016-17, MEES reported last year (MEES, 21 December 2012). Petrofac Emirates oil services firm, which won the contract in a consortium with a Korean firm, says its facilities will start operating in 2016. A second phase may lift it to 1mn b/d if a study currently underway to expand it is green lighted (MEES, 9 July 2012). The field is operated by Zakum Development Company (ZADCO – ADNOC 60%, ExxonMobil 28%, and Japan’s JODCO 12%).

The delay is symptomatic of the project slippage that is pressuring state-owned Abu Dhabi National Oil Company’s (ADNOC) 2017 target of 3.5mn b/d crude production capacity. Abu Dhabi is unlikely to hit it until 2019 at the earliest. ADNOC executes design work relatively efficiently, but then delays awarding engineering, procurement and construction (EPC) contracts. Petrofac Emirates in consortium with Daewoo Shipbuilding and Marine Engineering Company won the $3.7bn contract, which includes building crude processing trains on four artificial islands. Petrofac Emirates is a joint venture with state-owned Mubadala Development’s energy division and UK-listed oil services firm Petrofac. Petrofac Emirates’ share of the contract is $2.9bn. Korea’s growing presence in Abu Dhabi is giving it political and economic weight that is helping relatively inexperienced state-owned Korea National Oil Company (KNOC) compete for oil field concessions. (CONTINUED - 258 WORDS)