BP awards Oman rig contracts worth $730mn

Eight drilling rigs will be supplied for Khazzan gas field project

Photo for illustrative purposes
Photo for illustrative purposes

BP has awarded a pair of contracts for the construction and operation of drilling rigs for the Khazzan onshore gas project in Oman.

The firm has awarded two deals worth $730mn for drilling rigs. The first is a $400mn contract with KCA Deutag, which will supply five new-build land rigs for the project. These will be assembled in Nizwa in order to maximise employment opportunities for Omanis.

The second contract is a $330mn deal with Oman’s Abraj Energy Service, which is providing three rigs.

BP Oman general manager Dave Campbell said: “We are pleased to announce these contracts, which continue to progress our development of the gas resources at Block 61. Abraj Energy Service and KCA Deutag will play important roles in the massive drilling programme ahead.

Khalid Al Kindi, deputy general manager for BP Oman, added: “Building local content into our supply chain is a key focus area in BP’s procurement strategy. BP is committed to hiring and developing talented Omanis. We are also implementing a significant multi-million dollar long term social investment strategy to support education and enterprise development in Oman. All these are part of our commitment to deliver BP’s In-Country Value Plan (ICV)”

BP signed a $16bn deal to operate the Khazzan field with Oman's government in December 2013. It holds a 60% stake in the project, while Oman Oil Company Exploration & Production (OOCEP) retains the remaining 40%.

BP has said that it has "been actively awarding contracts to ensure that the project meets its deadlines".

Jacobs Engineering was awarded a $2bn deal to develop the site's infrastructure in and Petrofac won a $1.2bn EPC contract to build the central processing facility in February.

BP said around $90mn of supply contracts have gone to local Omani firms covering everything from road works on site to the supply of steel pipes and a water pipeline.

Construction work at the site is already underway and is expected to complete by the end of 2017.

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