Petrofacwins $250m Sharjah contract

Petrofac, the oilfield services company based in the UK, has won a US$250 million contract from the Government of Sharjah to operate the Sajaa gas plant and associated assets in the emirate.

September, 2008-Undated photo of Petrofac operations in Kauther, Oman.

LONDON // Petrofac, the oilfield services company based in the UK, has won a US$250 million (Dh918.2m) contract from the Government of Sharjah to operate the Sajaa gas plant and associated assets in the emirate, including the gasfields that supply the facility. The five-year services deal is part of a plan for BP to withdraw from its gas concession in Sharjah when its contract expires in November 2013.

At that time, the UK petroleum group will hand its 40 per cent joint venture stake back to the emirate. The contract sentPetrofac's stock up as much as 2.8 per cent in early trading in London yesterday. "Petrofac's track record demonstrates that it has the capability to ensure the uninterrupted, safe and reliable operation of the facilities, while we transfer operatorship to the Government of Sharjah prior to the end of the concession," said Abdulkarim Almazmi, the president and general manager of the Sharjah unit of BP.

BP Sharjah operates the Sajaa, Moveyied and Kahaif gas fields in Sharjah, along with the Sajaa gas processing plant, gas compression facilities and two export terminals for liquids extracted from natural gas. Petrofac said it would assume control of the operations by the end of this year, while the Sharjah Government would replace BP as the concession operator. About 130 staff involved with running the Sajaa facility would transfer to Petrofac during the transition period.

"I look forward to working with the Petrofac team as they work towards continuous improvement of safety and operational performance at the plant and its associated assets," said Sheikh Sultan bin Sultan Al Qasimi, the deputy chairman of the Sharjah Petroleum Council. "Appointing Petrofac before the end of the concession allows for a smooth management of change to be carried out while BP is still present as an equity holder in the concession."

The Sharjah Government's move to end its partnership with BP and instead to hire a technical services provider to operate the emirate's most important gas facilities raises questions about the future of large oil concessions in neighbouring Abu Dhabi that are due to expire within the next few years. BP is among the equity partners in concessions formed in the 1930s to operate some of the UAE's biggest onshore and offshore oilfields, which are all in Abu Dhabi.

The onshore contract expires in 2014, while its counterpart for several offshore fields is due to expire four years later. So far, the Abu Dhabi Government has not announced a decision on whether the contracts will be extended. BP and other international partners, including Royal Dutch Shell, ExxonMobil, Total, Japan Oil Development and Partex, are in talks with the Government over the concession renewals, while several potential new partners wait in the wings.

At the same time, some major international oilfield services companies such as Petrofac and Halliburton have been strengthening their presence in the UAE and wider Gulf region. Petrofac last year formed a joint venture with Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, for oil and gas projects overseas. The new Petrofac International enterprise has won a large contract to develop part of a giant gasfield in Turkmenistan.