Credits By: Upstream online
Three contracts between Saudi Aramco and U.S. McDermott related to the extensive development of the Zuluf field, a project expected to cost several billion dollars, have been terminated.
According to Oil and Gas Middle East, these contracts, valued at about $1.8 billion overall, were terminated because McDermott could not offer the bank guarantees that Aramco required of successful bids. This action follows a recent report by Energy Intelligence that suggested Aramco was closely scrutinizing its interactions with McDermott.
However, these three agreements are just some of the ones that Aramco has canceled. According to reports from Upstream, the solicitation of bids for additional Zuluf expansion projects has been suspended.
An unnamed source informed the news that “the formal revocation of Zuluf contracts represents a setback for global contracting leaders, including McDermott, who had shown interest in multiple development initiatives.”
Aramco is aggressively looking for replacement companies to fill the hole left by McDermott’s departure. Replacement candidates include Saipem of Italy and National Petroleum Construction Co. of Abu Dhabi.
Aramco’s overall strategy calls for improving three crucial fields for Marjan, Berri, and Zuluf. The development of the Marjan field is anticipated to increase production capacity by 300,000 barrels per day (bpd). In contrast, the extension of the Berri field is anticipated to increase output by 250,000 bpd. The expansion of the Zuluf field includes building a processing plant with a 600,000 bpd capacity.
According to Energy Minister Abdulaziz bin Salman, these measures support Aramco’s goal of increasing its production capacity to 13 million barrels per day by 2027. During an industry conference last year, Bin Salman underscored the importance of this effort by stating that Saudi Arabia’s oil production might reach 13.2 to 13.4 million barrels per day by 2027.
Charles Kennedy reported this for Oilprice.com.