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KCA Deutag wins $550mn contract for four new drilling rigs in Oman

Petroleum Development Oman (PDO) will award KCA Deutag Energy a ten-year contract for the provision of drilling services with four new highly automated rigs that will be built in Oman, the Aberdeen, UK-based international oil and gas services company said on Tuesday.

The ten-year contract comes with options to extend for a further two years and, with those options included, has a total value of around US$550mn, KCA Deutag Energy said in a statement on its website. It added that the project enhances an existing strong relationship between the two companies.

The innovative rigs will be constructed by International Drilling Technology Co (IDTEC) in Oman. IDTEC, majority owned by the KCA Deutag Group, is the group’s local rig manufacturing and servicing company, which has already acquired the necessary expertise and certifications for rig construction.

The company said that the technologically-advanced rigs will be the first of their kind to be constructed in the sultanate, marking a step change in the rig building capabilities in country.

KCA Deutag Energy will invest approximately US$100mn to build the new rigs in Oman and expects to commence operations in the second half of 2023. Around 40 per cent of this value will be spent with Omani suppliers, including local small and medium enterprises (SMEs).

The company noted that the project has high In-Country Value (ICV) and will provide many benefits to the local economy and community. The ICV benefits will continue throughout the life of the contract, securing employment for approximately 190 jobs.

The rig design and all key components will be provided by KCA Deutag’s new business unit, Kenera, through its Bentec engineering and manufacturing centre.

The modern rigs will be highly automated, fast-moving units designed for safe and efficient drilling operations in well-established Omani fields and will benefit from the latest technologies from KCA Deutag’s Well of Innovation.

Mohammed al Rashdi, PDO’s well engineering director, said, “Awarding this contract to KCA Deutag Energy is a key step in establishing local rig manufacturing capabilities, especially for mechanised rigs capitalizing on PDO journey to modernize its rigs fleet. This will also come with an opportunity to train and develop local Omanis in the design and manufacture of mechanised rigs, in addition, to supporting Omani SMEs and providing job opportunities for Omanis. It is a step change in the country to have locally manufactured light rigs for PDO.”

Simon Drew, president of KCA Deutag’s land operation, said, “KCA Deutag has been operating in Oman and working for PDO for almost 60 years and we are delighted to have been awarded this opportunity to continue this long-standing relationship.”

He said,“This investment demonstrates our commitment to PDO and Oman to deliver outstanding ICV with the first four rigs constructed locally. It is also validation of our excellent safety record, incident-free operations and technological performance – as well as an opportunity to deliver energy-efficient rigs that benefit from our fuel optimisation technology and are capable of adopting grid and hybrid technologies in the future.”

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  • #Oman
  • #Drillingrigs
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