KCA Deutag Bags $550MM PDO Deal

KCA Deutag Bags $550MM PDO Deal
The 10-year contract is said to come with options to extend for a further two years.

KCA Deutag Energy LLC has announced that ​Petroleum Development Oman (PDO) will award the company a 10-year contract for the provision of drilling services with four new “highly automated” rigs that will be built in the Sultanate of Oman.

The contract, which is said to come with options to extend for a further two years, has a total value of around $550 million, including extensions, KCA Deutag outlined. The company said it will invest approximately $100 million to build the new rigs and added that it expects to commence operations in the second half of 2023. 

KCA Deutag noted that the project has high In-Country Value (ICV) and said it will provide many benefits to the local economy and community. This includes securing employment for approximately 190 people, the company outlined.

“KCA Deutag has been operating in Sultanate of Oman and working for PDO for almost 60 years and we are delighted to have been awarded this opportunity to continue this long-standing relationship,” Simon Drew, the president of KCA Deutag’s land operation, said in a company statement.

“This investment demonstrates our commitment to PDO and the Sultanate of Oman to deliver outstanding In-Country Value with the first four rigs constructed locally. It is also validation of our excellent safety record, incident-free operations and technological performance – as well as an opportunity to deliver energy-efficient rigs that benefit from our fuel optimization technology and are capable of adopting grid and hybrid technologies in the future,” he added in the statement.

Mohammed Al Rashdi, PDO’s well engineering director, said, “awarding this contract to KCA Deutag Energy LLC is a key step in establishing local rig manufacturing capabilities, especially for mechanized rigs capitalizing on PDO journey to modernize its rigs fleet”.

“This will also come with an opportunity to train and develop local Omanis in the design and manufacture of mechanized rigs, in addition, to supporting Omani SMEs and providing job opportunities for Omanis. It is a step change in the country to have locally manufactured light rigs for PDO,” Rashdi said.

KCA Deutag’s latest deal comes off the back of several noteworthy contract awards in 2021. In November, the business revealed that it had been awarded contracts worth almost $185 million from “leading exploration and production companies across key markets in the Middle East region”. The names of the companies were not revealed by KCA Deutag.

​In June 2021, KCA Deutag revealed that it had secured a contract award and two contract extensions for platform drilling services in Russia, the UK and the Norwegian North Sea, which the company outlined had a combined value of approximately $550 million. In March last year, the company also announced  ​ that it had secured contracts worth around $110 million for its land drilling business in Pakistan, Russia, Kurdistan, south-eastern Europe and Germany.

KCA Deutag is a leading drilling, engineering and technology company working onshore and offshore, its website states. The company operates approximately 110 drilling rigs in 20 countries, either directly or through its affiliates, employing people in Africa, Europe, Russia, the Middle East, the Caspian Sea and Canada, its site highlights.

To contact the author, email andreas.exarheas@rigzone.com

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