Leading contractors have submitted technical offers to Abu Dhabi National Oil Company (Adnoc) for key engineering, procurement, and construction (EPC) packages as part of a major expansion program for the Upper Zakum offshore oilfield. This initiative is a central component of Adnoc's broader P5 growth strategy, which aims to increase the company's sustainable oil production capacity to 5 million barrels per day from the current 4.85 million barrels per day.

Field Significance and Expansion Goals

The Upper Zakum field, the world's second-largest offshore oilfield, currently has a production capacity exceeding 1 million barrels per day. Together with the Lower Zakum asset, these fields hold approximately 50 billion barrels of oil reserves. The new expansion phase is designed to increase Upper Zakum's production capacity to 1.5 million barrels per day in a phased manner over the longer term.

Investment and Development Context

This expansion aligns with Adnoc's recently announced plan to invest up to $150 billion over the next five years in oil and gas developments. The development plan, agreed upon by Adnoc and its co-venturers ExxonMobil and Inpex, involves upgrading the field's infrastructure to include AI-enabled remote operations, connecting to the UAE's clean energy grid to reduce emissions, and utilizing artificial islands for drilling to enhance environmental protection.

EPC Packages and Bidders

The expansion program involves at least three EPC packages, for which technical offers have been submitted.

Package 1 covers surface facilities on existing artificial islands, including integrated gas-lift compressors, produced water reinjection units, water treatment plants, and pre-assembled manifolds. Spain’s Tecnicas Reunidas has submitted a technical bid for this package, while a consortium of NMDC Energy and Saipem was expected to bid but is unlikely to have done so.

Package 2 involves offshore facilities, specifically multiple segments of subsea pipelines and subsea cables. Bidders for this package include NMDC Energy, Saipem, and McDermott International, with each company submitting a solo bid.

Package 3 entails work on the existing Zirku Island, requiring additional oil tanks, a water treatment unit, an export gas compressor, a condensate treatment unit, and associated power and utilities facilities. Potential bidders for this package are reported to be Tecnicas Reunidas and a grouping of NMDC Energy with Japan’s Chiyoda Corporation, though the bid submission for this package could not be confirmed.

Ownership and Field History

Adnoc holds a 60% stake in the Upper Zakum concession. Its partners are ExxonMobil, with a 28% interest, and Inpex, which holds the remaining 12%. The field, discovered in 1963, is located approximately 80 kilometres northwest of Abu Dhabi city, with development by Adnoc beginning in 1977.