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Occidental revives ISND-5

US player in talks about optimised development plan for fifth phase of project off Qatar, with initial tender expected soon

Occidental Petroleum is set to revive the fifth development phase of its Idd Al Shargi North Dome (ISND) oilfield development in Qatar, more than two years after the offshore project was put on the back-burner by the US oil company and partner Qatar Petroleum.

Industry sources told Upstream that Occidental recently approached leading international offshore contractors about work on some of the facilities required for the revised version of the ISND-5 development.

“We have been approached by Occidental, asking whether we would like to show interest in the optimised ISND-5 project,” one source confirmed.

The project is likely to be tendered in a slimmed-down format, aimed at reducing costs substantially following the industry downturn, sources said.

The ISND optimised phase-five field development plan involves surface facilities including several conductor-supported platforms (CSPs) with nine-slots each, 17 splitter wells, associated in-field pipelines as well as umbilicals and brownfield tie-ins on existing platforms, according to industry sources.

However, the initial work being offered by Occidental to the contractor community involves just the first offshore CSP.

“They (Occidental) are looking at only the first CSP at this moment, which is likely to be tendered by next month,” an informed source said.

The source added that the optimised ISND-5 project is expected to involve up to eight such units at a later stage, with the effort likely to gain momentum once the first platform work is awarded.

However, a second source claimed that the exact number of CSPs required for the project is not yet confirmed.

Contractors that are likely to show an interest for work on the first offshore CSP are believed to include US giant McDermott, Abu Dhabi’s National Petroleum Construction Company, Italy’s Saipem, Indian engineering major Larsen & Toubro, China's Offshore Oil Engineering Corporation and French major TechnipFMC, among others.

One project watcher described Occidental's optimised field development plan as innovative, adding that the US-based player is known for introducing new concepts for offshore developments. “The CSP introduced by Occidental is a very innovative concept, which has not been used by many players elsewhere. This should bring down costs for the operator,” he said.

While the tender process for the first CSP is likely to start by next month, Occidental is only likely to award the contract by the end of this year, sources said.

An offshore CSP will be a stand-alone platform lying in less than 50 metres of water. The facility is expected to have a total weight of about 1000 tonnes, added sources.

The workscope of the project being offered by Occidental is expected to involve a sizeable offshore installation and commissioning component, added sources.

Occidental declined to comment on an Upstream query on the ISND-5 project.

The company announced in 2013 that its wholly-owned subsidiary, Occidental Petroleum of Qatar, and state-owned Qatar Petroleum agreed on the phase-five field development plan for ISND, off Qatar.

Occidental said at that time that ISND-5 would comprise drilling over 200 additional production, water injection and water source wells, plus the installation of associated facilities required to support the additional wells.

The company also said in 2013 that “development activities are expected to constitute an aggregate investment exceeding $3 billion,” and work had “already begun and will continue to sustain oil production levels at about 100,000 barrels per day through the next six years.”

However, the tender process involving the offshore facilities required for ISND-5 was put on hold in 2015, because of the changed market conditions after oil prices fell.

The work scope that was originally tendered by Occidental included two clusters of six wellhead platforms, plus one process platform and several other facilities.

While industry sources suggested that the offshore facilities have been optimised significantly in the new version of the project, they did not elaborate on the new capital expenditure or any other facilities that are likely to be part of ISND-5.

ISND is located in 105 feet of water. It was discovered in 1961 and originally started production as far back as in 1963.