Saudi Aramco has launched the race for a key engineering, procurement, construction and installation (EPCI) contract that involves additional offshore infrastructure for its Safaniyah offshore oilfield.

Two people with direct knowledge of the development told Upstream that the Saudi Arabia state-owned giant recently issued the new Safaniyah upgrade tender as a part of its long term agreement (LTA) with offshore contractors.

The new project, named as contract release purchase order (CRPO) 93, includes brownfield work on the field, one of the sources said.

“We are working on the new tender and bids are likely to be submitted in January,” he said.

World’s largest offshore oilfield

With 37 billion barrels of heavy crude in place, Safaniyah is viewed as the world's largest offshore oilfield and is located about 200 kilometres north of Dhahran.

Aramco has been carrying out the further development of Safaniyah through multiple phases as it aims to maintain the production profile and arrest the decline at the oilfield.

Several offshore LTA projects are said to be in the tendering stage, as Aramco is expected to scale up its spending on key brownfield developments in the country.

Robust spending

Another person said Aramco’s offshore LTA market has been traditionally worth between $1.5 billion and $2 billion each year, but spending nosedived in the past year or two, as the coronavirus pandemic led to demand concerns and plummeting oil prices.

However, one project watcher said LTA spending is expected to be quite "robust" during 2022 as oil prices stabilise, with several upgrade projects said to be on the cards.

Scope details

The most recent LTA project on offer, CRPO 93, is expected to include the EPCI of at least one sizeable production deck module destined for Safaniyah, project watchers said.

Associated facilities of subsea pipelines, cables and tie-in to existing facilities are also a key part of the upgrade job, Upstream understands.

The work on the CRPO 93 is said to be quite challenging, considering the shallow nature of the oilfield.

McDermott and Saipem have been involved with most of the Safaniyah upgrade projects in the past.

LTA list

Up to 10 leading international contractors or consortia that are a part of Aramco’s coveted LTA arrangement are participating in numerous brownfield jobs being offered by Saudi Arabia.

These include: Malaysia’s Sapura; China’s Offshore Oil Engineering Company (COOEC); a pairing of Lamprell and Dutch player Boskalis; a grouping of UK-based TechnipFMC and Malaysia Marine & Heavy Engineering; McDermott International and Dynamic Industries of the US; Italy’s Saipem; a partnership of India’s Larsen & Toubro Hydrocarbon Engineering with Oslo-listed Subsea 7; Abu Dhabi’s National Petroleum Construction Company (NPCC) and South Korea's Hyundai Heavy Industries.

LTA contractors are taking an increasingly selective approach to new projects, unlike the previous requirement of bidding in each of the jobs.

Some of the LTA players likely to show interest in the Safaniyah upgrade job include the L&T-Subsea 7 grouping, McDermott Saipem and NPCC, upstream understands.

Recent awards

McDermott recently won three prized offshore contracts from Aramco as a part of the LTA arrangement.

While the US player did not name the projects, the offshore projects awarded to McDermott included CRPO’s 73, 74 and 84, project watchers said.

The offshore player said that as a part of the new contracts “McDermott will provide EPCI of four drilling jackets and seven oil production deck modules in Saudi Arabia's Zuluf, Ribyan, Abu Sa'fah and Safaniya fields.”

“Fabrication is expected to begin in the first quarter of 2022, with offshore installation commencing the fourth quarter of 2022 and overall completion expected the second quarter of 2023,” it added.