Petrofac signs long-term framework with Petroleum Development Oman

Petrofac announced on Thursday that it secured a long-term framework agreement with Petroleum Development Oman (PDO) for the provision of engineering, procurement and construction management (EP+Cm) support services for major oil and gas projects.

The FTSE 250 company said the agreement, which was for ten years with an additional five-year option, built upon a three-year programme of EP+Cm support contract delivery Petrofac had already undertaken on behalf of PDO.

Future projects undertaken through the framework agreement would be supported by Petrofac's Muscat office for technical delivery and to ensure sustainable in-country value is generated.

“This is a landmark agreement between our two companies and marks a new level of collaboration between PDO and Petrofac,” said group manager of engineering and production services Craig Muir.

“It builds upon a long-standing relationship which spans more than two decades and encompasses a significant number of projects undertaken in Oman on both a lump-sum and reimbursable basis.

“Our priority will be to deliver quality oil and gas facilities that are technically robust, with an absolute focus on safety and in-country value.”

Raoul Restucci, managing director at PDO, said the long-term agreement with Petrofac reflected the organisation’s “continuing commitment” to the safe and responsible development of hydrocarbons in the Sultanate, and to drive maximum in-country value from its operations.

“PDO seeks a high level of performance and commitment from our supply chain and this agreement reaffirms our determination to work with key partners in our supply chain to deliver real value for Oman and our shareholders.

“It is our firm belief the value that we have already created working closely together can be sustained well into the future and we look forward to extending our partnering with Petrofac in this next phase of our relationship.”

Petrofac confirmed it was currently undertaking two projects on behalf of PDO, through an EP+Cm delivery model.

They included the $1.2bn award in March 2014 for the Rabab Harweel Integrated Project (RHIP) and the $0.9bn award in June 2015 for the Yibal Khuff project.

“This is a major milestone in the recognition of Petrofac's engineering, procurement and construction management support service delivery capability,” said Petrofac’s managing director of EP+Cm, Roberto Bertocco.

“The agreement cements the effectiveness of our working relationship with PDO and paves the way for the direct transfer of knowledge, skills and lessons learned from RHIP and Yibal Khuff onto future PDO projects.”