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Zadco Offshore Upper Zakum to be awarded soon

Abu Dhabi’s Zakum Development Company’s (ZADCO) mandate was to develop the Upper Zakum field on behalf of ADNOC and for the benefit of the shareholders: ADNOC 60%, ExxonMobil 28% through its local subsidiary ExxonMobil Abu Dhabi Offshore Petroleum Company Ltd. (EMAD), and Japan Oil Development Company Ltd. (Jodco) holding the remaining 12%. ExxonMobil, ADNOC and Jodco will jointly provide support to the operating company.

Upper Zakum, in UAE, is the largest part of a reservoir that is now classed as the second-largest field in the Gulf and the fourth-largest in the world.

The upgrading of Upper Zakum is a strategic investment for ADNOC to fulfil its long-held target to increase Abu Dhabi‘s production capacity from 2.8 million bpd to 3.5 million b/d and to maintain the emirate’s position as OPEC‘s fourth largest producer. Since 2009, ADNOC  subsidiaries have started to award contracts to raise capacity at existing developments, and to tap undeveloped fields.

The award of the first Upper Zakum project was originally due to be made at the end of last year, but was delayed because companies had to resubmit their technical bids to accommodate changing technical specifications.

ZADCO is working hard on the enormous expansion of drilling and production to achieve its goal to produce 750,000 b/d of crude oil by 2015, from the current 500,000 b/d.

The upgrade of Upper Zakum capacity will be developed in three phases. The first phase will boost production capacity by 100,000 b/d, and a further 150,000 b/d will be added in the second phase. A final phase will ensure that production can be maintained over a 25-year period

In order to achieve the huge ramp up, ZADCO is shifting from traditional offshore platform production to a network of artificial islands which are already being built. A greater production is anticipated with drilling reach will be extended from 10,000 feet to around 30,000 feet from the new islands.

According to ZADCO two pilot wells have already been successfully drilled.

Last August, one of the first UZ750 project landmarks emerged from the waves in the southern part of the Upper Zakum field. The appearance of sand above the high water level marked a milestone in the history of the company in the transition from wellhead platform tower based facilities and jack-up drilling rigs  to island based facilities and land rig based drilling.

ExxonMobil will provide his support by developing technologies that will maximize recovery from Upper Zakum reservoirs. The company plans to establish a technology center in Abu Dhabi that will supply technology in the areas of reservoir management, well management, and production operations. Additional support for training and personnel development will come from ExxonMobil’s Upstream Training and Technology Center in Houston, USA.

ExxonMobil has also agreed to help establish a research and development facility at the Petroleum Institute, the leading technical university in Abu Dhabi.

Among the bidders McDermott and Saipem, Technip in JV with National Petroleum Construction Company (NPCC) submitted the lowest offer at $800 million who is now in clarification process.

In the scheme of the projects based on four islands for production and drilling, one will be used for power generation to supply the other islands. This offshore electrical network, for transportation and distribution, will represent more that 10% of the project capital expenditure.

The completion is planned by the end of 2015.

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1 Comment to “Zadco Offshore Upper Zakum to be awarded soon”

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