Petrofac wins $600 million contract with UAE oil giant ADNOC
Petrofac wins $600 million contract with UAE oil giant ADNOC
- ADNOC has awarded the London-based energy services company a $600 million contract
- The Habshan CCUS project is located approximately 93 miles southwest of Abu Dhabi
- Petrofac will supply carbon capture facilities, pipeline infrastructure and wells
Petrofac has secured another major contract from the United Arab Emirates’ state-owned oil giant to supply equipment for a major carbon capture system in the Middle East.
Abu Dhabi National Oil Company (ADNOC) has awarded the London-based energy services company a $600 million (£497 million) contract to supply carbon capture facilities, pipeline infrastructure and several sequestration wells.
The technology will be delivered to the Habshan Carbon Capture, Utilization and Storage (CCUS) project, located approximately 93 miles southwest of Abu Dhabi.
Contract: Petrofac has been awarded a $600 million contract to supply carbon capture equipment, pipeline infrastructure and sequestration wells for a major carbon capture project in the Middle East
It is the second major contract won by the company in 2023, after Petrofac won a £555 million contract for construction work on a new gas compressor plant at the end of June.
Petrofac last year won two additional contracts from the company for brownfield work and a two-year extension for field maintenance services at the Haliba oil field.
The latest deal with ADNOC coincides with the ADIPEC conference in Abu Dhabi, a key exhibition for the global energy industry, and comes two months before Dubai, host of the COP28 climate summit.
As one of the world’s largest oil producers, ADNOC’s investment in CCUS programs is part of its goal to achieve net-zero emissions from its operations by 2045, five years earlier than its previous target.
The government-run company predicts that when fully operational, the Habshan project will capture and store up to 1.5 million tons of CO2 per year underground and triple its total carbon capture capacity to 2.3 million tons per year.
Tareq Kawash, CEO of Petrofac, said: “By accelerating plans for cleaner energy, the UAE is investing in its future.”
“We look forward to combining our CCUS expertise and project delivery experience in the UAE to help ADNOC Gas implement their decarbonization plans, maximize energy production while minimizing emissions and support the energy transition in the UAE.”
Petrofac shares were 0.7 percent lower at 72.35 pence early on Tuesday afternoon. They are still well below their pre-Covid levels, partly because sales have declined in successive years.
Petrofac’s reputation was also badly damaged when it emerged that senior executives at the group had paid bribes to secure multi-billion pound contracts in the United Arab Emirates, Iraq and Saudi Arabia.
The scandal made it more difficult for the company to find work across the Middle East and it was briefly banned from bidding for ADNOC contracts.
Although the company began accumulating a large backlog of work last year, it is still struggling to increase sales and turn a profit.
The company posted a net loss of £165 million in the first six months of 2023 after its engineering and construction division was hit by write-downs on legacy contracts.