Adnoc invests $318 million to connect smart wells at Bu Hasa

The Abu Dhabi National Oil Company (Adnoc), announced on Tuesday an investment of up to $318 million (Dhs1.16 billion) to connect newly drilled smart wells to the main production facilities at Bu Hasa, which will sustain production capacity of 650,000 barrels per day (bpd) at Adnoc’s largest onshore asset.

The engineering, procurement and construction (EPC) contract has been awarded in two packages by Adnoc’s subsidiary, Adnoc Onshore. Package 1 is valued at up to $158.6 million (Dhs582 million) and has been awarded to China Petroleum Pipeline Engineering Co. Ltd, while Package 2, with a value of up to $159.1 million (Dhs583.9 million) has been awarded to Robt Stone (ME) LLC. The duration of the contracts is three years, with the option of a two-year extension.

The EPC award follows a competitive tender process and will see over 50 per cent of the combined value of both awards flow back into the UAE economy under Adnoc’s In-Country Value (ICV) programme, highlighting how Adnoc continues to prioritize ICV as it delivers on its 2030 strategy.

Yaser Saeed Almazrouei, Adnoc Upstream Executive Director, said, “This EPC award demonstrates how Adnoc is leveraging advanced technologies, such as smart wells with state-of-the-art remote capabilities, to drive higher performance from our assets and resources, and to generate additional value. The award underpins our strategic objectives to expand production capacity and create a more profitable upstream business with over half of the contract value flowing back into the UAE’s economy, supporting local businesses and stimulating economic growth.” The EPC contract will see up to 260 conventional and non-conventional smart wells installed, which enable remote operations. The installed tie-ins will be different from traditional tie-ins previously used by ADNOC Onshore, as the contractors will procure all required equipment on an upfront basis allowing for faster construction and well hand-over.

As part of the selection criteria for the award, Adnoc carefully considered the extent to which bidders would maximize ICV 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, fostering socio-economic growth, and creating job opportunities for UAE nationals. The successful bids prioritized UAE sources for materials, local suppliers, and workforce.

In 2018, Adnoc awarded a contract for the Bu Hasa Integrated Field Development Project (BUIFDP) to increase the production capacity of the asset to 650,000 bpd and sustain long-term production as part of its strategy to expand its crude oil production capacity to 5 million bpd by 2030. This new award builds on the substantial progress made to date and will enable Adnoc Onshore to unlock greater value from the asset.

The Bu Hasa asset is located 200 kilometers south of Abu Dhabi city. It is one of Adnoc’s oldest oil fields that have been producing since 1965.

The Abu Dhabi National Oil Company announced recently that it has successfully implemented an innovative initiative to drive efficiencies in its tendering process. This programme supports Adnoc’s ongoing efforts to enhance its approach to procurement and maximise value for Adnoc and its community of suppliers and service providers. The programme standardises the terms and conditions for the procurement of drilling and oilfield goods and services across Adnoc’s entire value chain. As a result, all of Adnoc’s pre-qualified bidders are now subject to the same terms and conditions in competitive tendering, reducing the timeline for legal negotiations from months to weeks. To deliver this first of its kind strategic initiative, Adnoc’s Legal Function, supported by its Upstream and Commercial & In-Country Value Directorates, developed global and oil and gas industry standard best practice terms and conditions for drilling and oilfield goods and services. This will support procurement of Adnoc’s entire value chain, sought feedback on commercial, risk and operational requirements from Adnoc’s pre-qualified community of goods and services providers and negotiated Adnoc’s standardised terms with the entire market.

WAM