The Abu Dhabi National Oil Company (ADNOC) announced, today, a significant investment to upgrade its giant Bab onshore field, one of its largest onshore producing assets, located 160 kilometers southwest of Abu Dhabi city. The investment will re-energize ADNOC’s first field producing Murban grade crude to sustain long-term crude oil production capacity and reinforces ADNOC’s commitment to maximizing value from Abu Dhabi’s vast hydrocarbon resources as it delivers its 2030 smart growth strategy.
The investment is valued at AED1.8 billion ($489 million), through an Engineering, Procurement and Construction (EPC) contract that will achieve In-Country value in excess of 75 percent, underscoring ADNOC’s drive to enabling sustainable value for the United Arab Emirates (UAE) and supporting the growth and diversification of the nation’s economy.
ADNOC Onshore, a subsidiary of ADNOC and the operator of the field, awarded the EPC contract to Archirodon Construction Overseas SA Co (Archirodon) to build the facilities and infrastructure required to sustain long-term crude oil production capacity of the field at 485,000 barrels per day (bpd). The contract, which has a term of 39 months, was announced at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC).
Abdulmunim Saif Al Kindy, Executive Director of ADNOC’s Upstream Directorate, said: “This award follows an extremely competitive and rigorous tender process that ensures that over 75 percent of the award value will flow into the UAE’s economy, stimulating local economic growth and nurturing new business opportunities for the private sector, in line with the leadership’s wise directives. The Bab field is integral to our strategy to create a more profitable upstream business and this award will ensure that we sustain long-term oil production capacity from a maturing field, underlining our commitment to making smart investments and engaging value-add partners to unlock and maximize value from Abu Dhabi’s vast hydrocarbon resources.”
The scope of the Bab field upgrade project includes the development of oil producing wells, water injection wells, artificial lift wells, well-bays, let down stations, water injection clusters and other infrastructure required to sustain the production capacity of the field.
Yaser Saeed Al Mazrouei, CEO of ADNOC Onshore, said: “The Bab field already plays an important role in supporting ADNOC’s production capacity mandates and this upgrade complements ADNOC’s upstream growth plans. The project will enable us to minimize life-cycle costs on the field and will deploy cutting-edge technologies to allow us to progressively and efficiently unlock the full potential of the field’s existing assets and wells, while tapping into new reservoirs to sustain long-term production output.”
As part of the selection criteria for the contract, ADNOC carefully considered the extent to which bidders would maximize In-Country Value in the delivery of the project. This is a mechanism integrated into ADNOC’s tender evaluation process, aimed at nurturing new local and international partnerships and business opportunities, catalyzing socio-economic growth and creating job opportunities for UAE nationals.
With more than AED 1.35 billion ($367 million) expected to flow back into the UAE’s economy over the lifetime of the project, the award will give significant stimulus to the country’s products and services and create additional skilled employment opportunities for UAE nationals.
The expansion of the Bab field comes two years after ADNOC Onshore awarded a contract to increase the capacity of the field from 420,000 to 450,000 bpd by 2020. This new award builds on the substantial progress made to date and will enable ADNOC Onshore to unlock and fully utilize the long-term potential of the field.
ADNOC is leveraging value-add partnerships and state-of-the-art technologies to optimize its operations, maximize recovery from maturing fields and identify and explore for untapped oil and gas resources as part of its 2030 smart growth strategy. The company is targeting an oil production capacity of 4 million barrels of oil per day (mmbpd) by the end of 2020 and 5 mmbpd by 2030, while enhancing efficiencies to enable a highly competive operating cost per barrel of oil.
