Abu Dhabi Company for Onshore Oil Operations (ADCO) has awarded Italy’s Tecnimont SpA a $2.25bn engineering, procurement and construction (EPC) contract.
As part of the deal Tecnimont will implement process and associated units for the Al Dabbiya Surface Facilities Phase III project in Abu Dhabi.
Adco, whose parent company is Abu Dhabi National Oil Company (Adnoc), operates the Al Dabbiya field located 40km south-west of the emirate.
The project is part of Adco’s North East Bab development programme and includes gathering crude oil through a network of pipelines, oil and gas export pipelines and a central process plant.
Pierroberto Folgiero, chief executive of Tecnimont SpA, said the project confirmed Maire Tecnimont’s strategy of pursuing opportunities in “selective, well known geographies”.
In March the firm won a contract to develop facilities for a petrochemicals complex in Egypt worth between $1.7bn and $1.95bn. The project is split evenly with the Dutch group Archirodon.
Adco is set to invest up to $7bn to meet its production target of 1.8 million barrels per day (bpd) by the end of 2017 from the current capacity of 1.6 million bpd.
Adco operates the largest onshore oilfields, which are currently responsible for about 40 per cent of the country’s output of 2.8 million bpd. The country aims to increase its total output to 3.5 million bpd by 2017.
Adnoc took 100 per cent ownership of the onshore fields when the concessions with major oil companies expired in January after 75 years.
The most pressing issue for reaching the 2017 target is the renewal of the concessions and any uncertainty surrounding their tenure and the partners that will be involved, analysts have said.
“[The Italian producer] Eni is keen to be a part of the UAE market and made an excellent technical offer [to Adnoc], and we await the decision of the UAE authorities,” said Giorgio Starace, Italy’s ambassador to the UAE.
“These are all strategic agreements that are in the framework in the growing bilateral partnership between Italy and the UAE,” he said after the announcement of the Maire Tecnimont deal, which he said gave “prestige” to Italian companies looking to work in the region.
