ADNOC dishes out $744 million deal for Belbazem field development

The Abu Dhabi National Oil Company (ADNOC) has awarded a $744 million (AED2.73 billion) contract to NPCC for the full field development of the Belbazem Offshore Block with the first oil expected in 2023.

ADNOC
Source: ADNOC

Announcing the contract award on Tuesday, ADNOC said it is underscoring its drive to unlock and maximize value from all of Abu Dhabi’s fields as it expands its oil production capacity to 5 million barrels per day (mmbpd) by 2030.

Located 120 kilometres northwest of Abu Dhabi city, the Belbazem Block consists of three so-called marginal offshore fields; Belbazem, Umm Al Salsal, and Umm Al Dholou.

Al Yasat Petroleum Operations Company (Al Yasat), ADNOC’s subsidiary and joint venture (JV) with China National Petroleum Corporation (CNPC), awarded the engineering, procurement and construction (EPC) contract to the National Petroleum Construction Company (NPCC).

ADNOC and CNPC hold 60 per cent and 40 per cent stakes in Al Yasat respectively.

Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, said: “We are very pleased to commence the full field development of the Belbazem Offshore Block, together with our strategic partner CNPC”.

He added: “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 to stimulate local economic growth, in line with the wise directives of our Leadership”.

The scope of the award covers engineering, procurement, construction, and commissioning activities for the offshore facilities required to enable full production capacity of 45,000 bpd of light crude with API gravity of around 35 degrees and 27 million standard cubic feet per day (mmscfd) of associated gas from Belbazem. First oil is expected in 2023.

As part of the process leading up to the EPC award, Al Yasat undertook a front-end engineering design (FEED) competition among the bidders to optimize the project.

According to ADNOC, this initiative reduced the originally scheduled tender time by up to 12 months through removing the need for the technical bidding process for the EPC stage and has enabled savings of approximately $190 million (AED697.3 million) in capital expenditure (CAPEX).

Shaheen Al Mansoori, Acting CEO of Al Yasat, 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”.

The project scope includes three offshore Well Head Towers (WHTs), one in each of the Block’s three fields, interconnecting subsea pipelines, and cables to Zirku Island, located around 60 kilometres from Belbazem field.

The scope also covers the development of greenfield facilities for water injection, produced water treatment, gas compression, and associated utilities as well as brownfield works for tie-in to existing facilities at Zirku Island.

Al Yasat’s concession areas cover two blocks; one offshore and one mixed onshore/offshore. The offshore block includes oil fields at Bu Haseer, Belbazem, Umm Al Salsal, Umm Al Dholou, and Arzanah while the onshore/offshore block is located southwest of Abu Dhabi city.

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Bu Haseer is the first of Al Yasat’s fields to come online following the start of production in 2018.