Saudi Aramco awards Chinese firm contract for artificial islands

The state oil company plans to raise production capacity from the Berri field to 500,000 barrels per day from 250,000 bpd by 2023

Development of offshore fields is integral to Saudi Arabia's plans to maintain production capacity. Reuters

Saudi Aramco, the world’s largest oil producing company, awarded China Harbour Engineering Arabia a contract for the construction of two artificial islands as part of plans to expand offshore capacity.

The Chinese engineering firm is to build the man-made drilling islands by 2020 to support production from the Berri field, where Aramco is looking to double production to 500,000 barrels per day per by early 2023.

The award comes amid a flurry of upstream activity in Saudi Arabia, which accounts for 12.9 per cent of global crude production. Saudi Aramco last week awarded Baker Hughes a contract to oversee expansion of production capacity at the offshore Marjan field. Development of Berri, Zuluf and Marjan fields form part of efforts by the oil company to maintain production capacity at around 12 million barrels per day and offset onshore decline.

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China Harbour Engineering will execute construction of two islands offshore the King Fahad Industrial Port causeway in the industrial city of Jubail to support production from the Berri field.

The scope of work includes installation of a new gas oil separation plant on Abu Ali island as well as additional gas processing facilities at the Khursaniyah gas plant to process condensate associated with the Berri field expansion.

Development of spare capacity is critical for Saudi Arabia. Aramco has upped production since July as part of a concerted effort by Opec and its allies to balance the oil markets amid a resurgence in crude prices. The kngdom reported 10.288 million bpd crude oil production at the end of July, a nearly 350,000 bpd jump from its self-reported figures for the first quarter.