Scomi Oiltools Wins Major Norwegian Drilling Waste Management Contract

Scomi Group Bhd’s subsidiary in the oil and gas industry, Scomi Oiltools (Europe) Ltd. has won a major drilling waste management (“DWM”) contract with BP Norway. The project, which marks the first time that Scomi Oiltools has secured a DWM tender with BP in Norway, covers complete DWM solutions both offshore and onshore, Norway. The project duration would be up to 4 years with the option of a 2-year extension. The anticipated contact value for this project is US $12 million with a potential of US $24 million.

For the offshore portion under the contract, Scomi Oiltools will provide drilling waste management solutions for BP on their rig located in the Skarv field development, where BP has made a sizable investment of USD 5 billion. For onshore works, Scomi Oiltools with be handling and processing all of the drilling waste as well as the waste water. Scomi will be working together with Veolia Miljo (“Veolia”) for the processing of drilling waste and waste water employing new technology in waste water treatment.

“We are very excited and enthusiastic about this contract as it indicates many of our company’s strengths. One is of course our relationship with BP will reach another milestone,” said Bernt Haave, Country Manager, Scomi Oiltools, Norway. “This contract is also testament to Scomi Oiltool’s technical capabilities. Working together with Veolia is another plus for us as they are the industry experts in waste water treatment. With such stringent regulations for discharging treated water in Norway, we are proud to be able to comply,” continued Bernt Haave.

In line with regulatory requirements on the degree of total organic content in waste water for disposal, Scomi Oiltools has introduced a faster and better technology for the treatment of waste water to enhance reduction of total organic carbon content (“TOC”) prior to disposal. This technology brings drilling waste management fundamentals into conventional waste water treatment for the reduction of organic waste in the water. Under the terms of collaboration, Veolia, Norway’s leading environmental services provider, will set up new facilities near the town of Sandnessjoen while Scomi Oiltools will offer its technical R & D expertise, waste management equipment and technology.

“This new contract with BP is a good start for 2009 and we are confident that our investments in environmental treatment and protection technology will continue to grow despite the current market conditions in oil and gas sector. We are now starting to see the returns from our investments over the last few years and we believe it will positively contribute towards our business growth in the next few years” added Bernt Haave.

Besides effectively treating waste water, the new waste water treatment plant will also reduce operational costs. We will be using our proven drilling waste management equipment and the technology employed will eliminate the use of costly filter cartridges as well as requiring less manpower to operate. The plant has a capacity of treating 3-4m3 of waste water per hour.

Scomi provides Drilling Fluids (“DF”), Drilling Waste Management (“DWM”) and distribution of  oilfield products and services under its Oilfield Services business.