Abu Dhabi National Oil Company (Adnoc) plans to extend its “mega tender" scheme, after the company’s pilot tender halved the cost of a major steel purchase for its operating companies, a report said.
With this, Adnoc aims to streamline operations to reduce costs, added The National report, adding that the plan is part of a wider reform process in the region as governments push for a more rapid transformation away from a public-sector mentality to a more entrepreneurial approach.
Kuwait Petroleum Corporation, for example, is following Adnoc’s example in combining and streamlining procurement for its operating companies and is in the process of its own first steel “mega tender", the report said, citing industry sources.
Sultan Al Jaber, Adnoc’s chief executive plans to push through reforms and modernise an often lumbering and opaque oil-sector bureaucracy, according to the report.
Abu Dhabi National Oil Company (Adnoc) had picked Vallourec to supply steel tubing to its three main operating companies, as the French company beat out a large field of competitors to win Abu Dhabi’s first centralised “mega tender".
The tender is the first to group together Adnoc’s three main operating companies (opcos) amid the parent company’s drive to improve efficiency and push down costs following the oil price crash.
Vallourec beat out competitors including Nippon Steel, GSC and Tenaris for the commodity steel tube products, and players including Jubail Energy Services Company (Jesco) of Saudi Arabia, China’s TPCO and TMK of Russia for the specialised products. The deal is to supply 100,000 tonnes of oil country tubular goods (OCTG) for the three years through 2018, covering commodity and specialised products.
Adnoc is one of the oil and gas world’s biggest spenders and has a five-year programme to invest – with its partners – up to $25 billion to develop both onshore and offshore oilfields to boost production by 700,000 barrels per day, to 3.5 million bpd, by 2018.
The major onshore oilfields are operated by Abu Dhabi Company for Onshore Petroleum Operations (Adco), which is 60 per cent owned by Adnoc, with France’s Total accounting for 10 per cent and smaller shares by Japan’s Inpex and GS Energy of Korea.
The two major offshore consortiums, Adma-Opco and Zadco are in partnership, respectively, with BP, Total and Jodco of Japan on the one hand, and ExxonMobil and Jodco on the other.
Last month, the appointment of a new chief executive at Adnoc, Sultan Al Jaber, was thought to be part of a broader shake-up of Abu Dhabi civil service and government-related entities (GREs) leadership with a mandate to drive efficiency in a low-oil-price environment.
The pooled procurement for Adnoc, the emirate’s biggest spender, makes total sense from a business standpoint.
