Editor’s Insight

Local presence, advanced technology secure important framework agreement with NOC in Oman

Despite today’s low oil prices, some companies continue to invest in production. Oman’s national oil company (NOC), Petroleum Development Oman (PDO), is one of them. PDO comprises a joint venture between the Government of Oman, Shell, Total, and Partex.

Oman’s population continues to grow. To meet growing power demands, Oman officials recently expanded the country’s gas production capacity.

PDO produces 70% of Oman’s oil and most of its natural gas supply. The NOC’s goal is to produce 600,000 barrels per day well before its target date of 2019.

In June 2015, Siemens concluded a Frame Agreement (FA) with PDO. The FA calls for 17 compressor trains for a total of six oil and gas production projects between now and 2022. There’s an option to add additional compressor trains to the scope.

Siemens’ presence in Oman for more than 40 years did not win the company a seat within PDO’s 2007 Frame Agreement. However, in 2014 the time came for PDO to develop a new FA. On June 30, 2015, following 19 months of proposals, evaluations and negotiations, PDO granted the FA award to Siemens. Coincidentally, this was the same day Siemens completed its acquisition of Dresser-Rand.

The first order under the Frame Agreement was received in the first quarter of 2016 for the Yibal Khuff project. The scope includes three barrel-type compressor trains driven by electric motors (comprising two STC-SV (8-6-A) export gas compressors and one STC-SV (6-2-A) regeneration gas compressor). The second order under the Frame Agreement was received in the second quarter of 2016 for the Yibal Rejuvenation project. The scope includes one barrel-type compressor train driven by an electric motor (comprising one STC-SV (6-6-A) compressor. All of the above machines will be manufactured, tested, assembled, and delivered from the Duisburg facility located in Germany, which is now part of the Dresser-Rand business within Siemens Power & Gas Division.

“Siemens’ success in securing this FA marks an important oil and gas reference point for us in Oman. The technical requirements for the FA were complex and demanding and we went up against some of our toughest competitors,” said Devavrat Tak, Project Development Manager, Oil & Gas Sales, New Equipment – Middle East for the Dresser-Rand business.

Developing oil deposits is complex. PDO had stringent requirements. References for other, similar projects were critical during the negotiation process.  Siemens focused on its highly efficient STC compressor line and the flexibility it affords despite unpredictable gas well operating conditions (and flow) that occur over the years. Higher efficiencies, advanced technologies for challenging applications, and the ability to manufacture, package and test a complete package (with sub-assemblies) in one location are the strengths demonstrated by Siemens.

Local presence was also critical. Siemens has a well-established local presence (more than four decades) and network in Oman. Siemens also has supported continuous local development. The FA stipulates that suppliers commit to maximizing local content.

“We expect to see continued growth in Oman’s economy in part due to the recruitment of local Omanis who will be trained as engineers and technicians,” said Tak.

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