DUBAI Jan 25, 2007 (Dow Jones Newswires)
Saudi Arabian Oil Co., the world's largest oil company by production, is expected to award by the end of January an estimated $1 billion contract to Belgium dredging contractor Jan De Nul to help it develop the 900,000 barrel-a-day Manifa offshore oil field.
The Belgium company, which in 2005 had a turnover of almost 800 million euros ($1.04 billion), is preparing for the "contract to be signed next week," a Jan De Nul official told Dow Jones Newswires Thursday.
Saudi Aramco wasn't immediately available to comment when contacted by Dow Jones on the expected awarding of the contract, the first construction contract to be signed on the Manifa project.
Under the contract, Jan De Nul will carry out dredging works in the Persian Gulf to build "drilling islands and a causeway to provide access for drilling of wells," according to Aramco documents seen by Dow Jones.
The 41-kilometer causeway, which is scheduled to be completed in December 2009, will provide Aramco with a direct link from the coast to shallow-water offshore platforms. The project is part of the estimated $10 billion Manifa development program, Aramco's largest-ever offshore project and aims to add 900,000 b/d of Arabian Heavy crude production by mid-2011, according to the documents.
Persian Gulf oil producers are spending income generated from three years of high oil prices on expanding and upgrading their crude oil production capacity to meet rising global demand, in particular from fast-growing Asian economies such as China and India.
The Manifa program will support Saudi Arabia's plan to raise production capacity beyond the 12.5 million b/d targeted by 2010 from just above 11 million b/d now.
Apart from the Manifa causeway, Aramco will also award contracts for the construction of central processing facilities, which - in addition to processing the crude - will process 120 million cubic feet of associated sour gas and 50,000 b/d of condensate, the documents say.
The Arabian Heavy crude will be exported from Aramco's Al-Juaymah and Ras Tanura terminals, also located in the country's east, while the gas and the condensate will be processed at the Khursaniyah gas plant, which will be expanded as part of the Manifa program.
The scheme also involves the construction of four pipelines and a water supply system.
Aramco will inject about 1.35 million b/d of aquifer water to maintain the field's pressure, the documents say.
The Dhahran-based company is going ahead with the project despite a steep decline in oil prices over the past seven months, which has seen benchmark crude futures in New York dropping by almost a third since a record $78.40 a barrel last July and by 10% since the beginning of the year.
Copyright (c) 2007 Dow Jones & Company, Inc.
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