Saudi Aramco has awarded contracts together worth more than $4.5 billion for five key packages meant for its giant Zuluf offshore oilfield expansion scheme in the Persian Gulf.

Several people familiar with the development told Upstream that Aramco recently placed letters of intent (LoI’s) to three leading international offshore contractors for a quintet of engineering, procurement and construction (EPC) packages comprising the Zuluf incremental production project.

“LoI’s have been placed and the formal signing is expected within weeks,” one said.

McDermott International of the US, a pairing of India’s Larsen & Toubro (L&T) with Oslo-listed Subsea 7 and Abu Dhabi’s National Petroleum Construction Company (NPCC) have landed prized EPC packages for the huge expansion scheme.

McDermott won one package, while the L&T-Subsea 7 partnership and NPCC have been awarded two packages each, Upstream understands.

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The Zuluf incremental project is a key element of Saudi Arabia’s strategy to boost its oil production capacity to 13 million barrels per day, from the existing 12 million bpd level.

While the kingdom has been producing well below its installed capacity, and squeezing production in line with the Opec+ agreement, it is scaling up capacity as it seeks to maintain its position as the largest crude oil exporter in the world.

Multi-billion development

The much-delayed development is expected to cost up to $8 billion and aims to boost crude output by as much as 600,000 barrels per day, almost doubling the field’s production capacity.

Zuluf is currently said to be producing between 550,000 and 600,000 bpd of Arabian Medium crude and Aramco is targeting additional volumes from the Arabian Heavy reservoir in its next expansion phase.

Five contracts

Saudi Arabia's state-controlled giant offered the Zuluf five contracts within the framework of its coveted long-term agreement (LTA) with a group of international offshore contractors.

Aramco launched the tenders last year, dubbing them contract release purchase orders (CRPOs).

McDermott has won the first package — called CRPO 79 — covering multiple segments of onshore and offshore 42-inch oil trunklines.

The L&T-Subsea 7 consortium has landed the second and third packages, CRPO 80 & CRPO 81, Upstream understands.

The second package — CRPO 80 — comprises nine water-injection wellhead topsides, two water-injection tie-in platforms, infield lines and subsea cables.

CRPO 81 — comprises multiple additional water-injection wellhead topsides, one water-injection tie-in platform plus associated offshore infrastructure.

In addition, UAE-based fabrication giant NPCC has won the fourth and fifth Zuluf packages, CRPO 82 & CRPO 83, according to project watchers.

The fourth package — CRPO 82 — includes at least 12 oil-handling wellhead topsides, two oil tie-in platforms and one electrical distribution platform, while the fifth one — CRPO 83 — is made up of 12 additional oil-handling wellhead topsides, two oil tie-in platforms, as well as infield pipelines and cables.

LTA players

Up to 10 LTA contractors are part of Aramco’s LTA arrangement, but some players chose to stay away from the Zuluf tender process.

In addition to the three selected players, the LTA contractors include—Malaysia’s Sapura Energy; China’s Offshore Oil Engineering Company (COOEC); a pairing of Lamprell and Dutch player Boskalis; a grouping of UK-headquartered TechnipFMC and Malaysia Marine & Heavy Engineering; Dynamic Industries of the US; Italy’s Saipem and South Korea's Hyundai Heavy Industries.

Aramco declined to comment following a request for further information on the Zuluf offshore awards.

Onshore packages

Leading contractors are also chasing two substantial packages for Zuluf’s onshore scope of work.

The two contracts are thought to be together worth more than $2.5 billion and are another key part of the project.

The Zuluf field is located about 40 kilometres offshore Saudi Arabia's northeast coast in about 40 metres of water.

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