October 11, 2008

Aramco may award USD 3 billion Manifa work by May

MEED reported that three international contractors namely Snamprogetti, JGC Corporation and TR have emerged as frontrunners to win more than USD 3 billion worth of engineering, procurement and construction contracts on Saudi Aramco's 900,000 barrel a day Manifa oil field.

The first package worth about USD 1.8 billion covers the construction of central processing facilities including a gas oil separation plant. Snamprogetti is in pole position for the package, edging ahead of JGC, TR, South Korea's Hyundai Engineering & Construction Company, France's Technip, Japan's Chiyoda Corporation and Italy's Techint.

JGC is the favorite for the second package worth USD 800 million, covering utilities, storage and shipping at the central processing facility. It is thought to have won the deal over Techint, Snamprogetti and Hyundai Engineering & Construction.

TR is expected to take the USD 500 million final package covering power generation and the main substation, from South Korea's Hyundai Heavy Industries and Italy's Technimont.

Aramco is expected to finalize its technical evaluation of bids and issue the contracts by mid May 2008. The latest bidding activity caps a frantic few months for Aramco. The development of Manifa is regarded as crucial for Riyadh to hit its target of increasing production capacity from 10.8 million barrels a day to 12.5 million barrels a day by 2009.

Global US oil service giants Schlumberger and Halliburton have been awarded separate drilling deals on Manifa worth up to USD 1 billion in total, covering horizontal drilling, stimulation and cementing.

Aramco is investing heavily in oil production and refining over the next 5 years, with much of that spending expected to consolidate existing fields and more effectively develop downstream production opportunities.