The Abu Dhabi National Oil Company (ADNOC) has announced an AED5.1 billion (US$1.4 billion) investment to upgrade and expand its Bu Hasa field that will increase crude oil production capacity to 650,000 barrels per day (bpd).
This is an important step towards delivery of ADNOC’s 2030 smart growth strategy that seeks to increase its crude oil production capacity and reduce cost to create a more profitable upstream business.
An Engineering, Procurement and Construction (EPC) contract has been awarded to Tecnicas Reunidas SA by ADNOC’s subsidiary, ADNOC Onshore, which operates the field. The works are expected to take 39 months to complete, and the upgrade will increase oil production capacity from 550,000 bpd to 650,000 bpd by the end of 2020.
The EPC contract was signed on Wednesday by Yasser Saeed Al Mazrouei, CEO of ADNOC Onshore and Ricardo Sanchez Galindo, Upstream Business Development Director, Tecnicas Reunidas.
Dr. Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, said: "This significant investment in the Bu Hasa field will enable production capacity to be increased and generate additional value.”
“We are on track to meet our production capacity target of 3.5 million barrels of oil per day by the end of this year, and, as we look beyond that to 4 million barrels per day by the end of 2020, this contract is yet another sign of our clear commitment to making smart investments to maximise the value of Abu Dhabi’s oil resources and drive significant In-Country Value, in line with our wise leadership’s directives," he added.
The asset upgrade and expansion include facilities, new pipeline networks and production hubs, as well as the conversion of three trains in a central degassing station and other related facilities. In addition to the incremental oil production from Bu Hasa, the project will streamline water handling, implement a second gas lift recovery phase and improve the overall production efficiency while reducing the number of inactive wells.
Also Wednesday, ADNOC and Mubadala Investment Company (Mubadala) signed a framework agreement to explore together potential global growth opportunities that build on Mubadala’s diverse portfolio of refining and petrochemicals assets and support ADNOC’s international Downstream investment ambitions.
As part of the framework agreement, ADNOC and Mubadala will explore the potential for the processing of crude oil and other hydrocarbons supplied by ADNOC, as well as potentially utilizing technologies owned by Mubadala with product offtake by other ADNOC companies. This end-to-end investment model allows for the UAE to not only assure long-term security of its hydrocarbon resources but allows for margin capture along the value chain.
