UK-based oil and gas services player KCA Deutag Energy has won a 10-year contract from state-owned Petroleum Development Oman (PDO) for drilling services involving four automated land rigs that will be built in the sultanate of Oman.
The 10-year contract comes with options to extend for a further two years and will together have a value of around $550 million, the company said in a statement this week.
“KCA Deutag Energy will invest approximately $100 million to build the new rigs in the sultanate of Oman and expects to commence operations in the second half of 2023,” the company noted.
KCA Deutag said that up to “40% of this value will be spent with Omani suppliers, including local small and medium enterprise (SME) companies”.
The rigs will be constructed by the International Drilling Technology Company (IDTEC) in Oman, over an 18-month period, it said.
IDTEC — majority-owned by KCA Deutag — is the group's local rig manufacturing and servicing company, which has acquired the necessary expertise and certifications for rig construction, the company added.
“The technologically advanced rigs will be the first of their kind to be constructed in the sultanate of Oman, marking a step-change in the rig building capabilities in-country."
Mohammed Al Rashdi, PDO’s well engineering director, said the deal is “a step-change in the country to have locally manufactured light rigs for PDO".
Simon Drew, the president of KCA Deutag's land operations said the company would deliver energy-efficient rigs that will benefit from its fuel optimisation technology and “are capable of adopting grid and hybrid technologies in the future”.
The UK player said the “rig design and all key components will be provided by KCA Deutag's new business unit, Kenera, through its Bentec engineering and manufacturing centre”.
“The modern rigs will be highly automated, fast-moving units designed for safe and efficient drilling operations in well-established Omani fields,” it added.