Saudi Aramco to Finalize Multibillion-Dollar Contracts for Largest Offshore Oilfield

Saudi Aramco is in the final stages of selecting preferred contractors for two substantial engineering, procurement, and construction (EPC) deals concerning the onshore infrastructure required for expanding the Safaniyah oilfield. This growth is a critical element of Aramco's comprehensive strategy to increase its oil production capacity to 13 million barrels per day by 2027, which is a rise from the present capacity of 12 million bpd.

At the heart of this expansion initiative is the Safaniyah oilfield, recognized as the world's largest offshore oilfield. With multiple tenders both offshore and onshore currently in the bidding stage, Aramco is poised to conclude the awards within the coming weeks for two onshore EPC packages. These packages are estimated to collectively range between $4 billion and $5 billion, as revealed by sources with direct insights into the matter.

Larsen & Toubro (L&T), a prominent Indian engineering giant, is reportedly well-positioned for securing the initial Safaniyah contract, which encompasses the construction of a substantial gas oil separation plant (GOSP) facility. While L&T is considered a potential front-runner, the actual award placement by the operator is yet to be confirmed, according to insiders.

On another front, South Korea's Hyundai Engineering & Construction is emerging as the favored contractor for a second EPC package, which involves offsite and utilities, according to additional sources. The successful conclusion of these contracts is integral to the overall expansion strategy for Safaniyah, which currently produces around 1.3 million bpd. The expansion initiative aims to potentially elevate the output to a remarkable 2 million bpd.

Aramco's Chief Executive, Amin Nasser, has affirmed the company's aspirations to achieve a substantial increase of nearly 700,000 bpd from Safaniyah. However, the specific timeline for this boost is yet to be disclosed. The expansion project mandates the establishment of at least four significant gathering platforms, 29 wellhead platforms, 22 water injection platforms, and an offshore accommodation facility. Additionally, it involves the implementation of various segments of subsea pipelines, composite cables, and modifications to topsides at existing facilities.

Situated approximately 200 kilometers north of Dhahran, Safaniyah has been a production hub since 1957 and still holds an estimated 37 billion barrels of heavy crude. Aramco has been strategically advancing the development of this oilfield through multiple expansion phases, aiming to sustain its production profile and counteract the natural decline that aging oilfields often face.

As the finalization of preferred contractors for the Safaniyah expansion nears completion, Aramco underscores its commitment to securing a prominent position in the global energy landscape. The success of this expansion initiative not only aligns with the company's ambitious production targets but also reinforces its role as a key player in the ever-evolving dynamics of the international oil and gas sector.