ADNOC benefits from economic downturn

OIL PROJECTS: Time to save money as economic downturn bites. (Getty Images)

Abu Dhabi National Oil Company (ADNOC) has saved about 20 percent on costs of projects worth $3.5 billion awarded this week due to the global economic downturn, the state news agency WAM reported on Monday.

It quoted Abdul-Munim al-Kindi, general manager of ADNOC's onshore unit ADCO, as saying the cost of projects awarded to foreign companies for work on three fields "was 20 percent lower that the total cost possible six months ago."

On Sunday, ADCO awarded a $2.3 billion deal to oil services firm Petrofac to develop the Ahab field. It awarded a $1.20 billion contract to Spain's Tecnicas Reunidas and Athens-based Consolidated Contractors International Co for the Sahil and Shah fields.

Kindi said ADCO planned to invest 45 billion dirhams ($12.25 billion) to increase oil output to 1.8 million barrels per day by 2016 from a current 1.5 million bpd, WAM said.

The output increase is part of a wider plan for the United Arab Emirates to boost crude capacity to 3.5 million bpd, up from 2.8 million bpd. OPEC-member the UAE is the world's fifth-largest oil exporter.

Kindi said financing for the projects to increase output -- which would include work on five other fields -- would be provided by ADCO's partners without the need to borrow from local or international banks, it added.

On Sunday, a spokesman for a venture by Saudi Aramco and France's Total said the companies wanted bidders for a new joint refinery to chop at least $1.2 billion, or about 10 percent, from costs due to the global economic downturn.

Top oil exporter Saudi Aramco has sent bidders back to the drawing table on several mega-projects to expand energy capacity as it looks to take advantage of the slide in prices for commodities and to drive down costs. (Reuters)

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