UK-based oil and gas services firm KCA Deutag Energy has been awarded a 10-year contract by state-owned exploration and production company Petroleum Development Oman (PDO) for drilling services comprising four automated land rigs that will be built in the sultanate.
The company said in a statement that the 10-year contract includes options to extend for another two years, and the total value of the contract is expected to be around $550 million.
“KCA Deutag Energy will invest approximately $100 million to build the new rigs in the sultanate of Oman and expects to commence operations in the second half of 2023,” the company noted.
The UK firm noted that up to “40 percent of this value will be spent with Omani suppliers, including local small and medium enterprise (SME) companies”.
“KCA Deutag has been operating in Sultanate of 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. This investment demonstrates our commitment to PDO and the Sultanate of Oman to deliver outstanding In-Country Value with the first four rigs constructed locally. It is also a 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 optimization technology and are capable of adopting grid and hybrid technologies in the future.”
The innovative rigs will be constructed by the International Drilling Technology Company (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.
Mr. Mohammed Al Rashdi, PDO Well Engineering Director said that, “Awarding this contract to KCA Deutag Energy LLC is a key step in establishing local rig manufacturing capabilities, especially for mechanized 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 mechanized 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,” Mr. Al Rashdi further added.