NPCC eyes Adnoc oil projects
Abu Dhabi, December 19, 2011
Abu Dhabi-based oil and gas services contractor National Petroleum Construction Company hopes the launch of a number of big projects in the Emirates next year will boost revenue after a flat 2011.
"At least four to five mega projects will be launched by Abu Dhabi National Oil Company (ADNOC) with huge packages in billions of dollars and we see opportunities there", chief executive Aqeel Madhi told Reuters in an interview.
The majority state-owned firm has had a difficult 2011, facing stiff competition from price competitive Asian contractors actively bidding for projects across the Gulf.
Next year could be better, with NPCC hoping for Abu Dhabi's backing to win projects in the UAE. It also plans to target projects in Saudi Arabia and India.
Adnoc was expected to launch offshore projects as it seeks to boost oil and gas output. Despite winning significantly fewer projects this year, revenue will be flat due to a backlog of projects, Madhi said, adding profit could be hit by lower margins.
"We face aggressive competition from Koreans, Chinese and Indian companies who offer unrealistic prices," he said without giving figures as the firm is not obliged to declare financials publicly.
As competition heats up in its home and neighbouring markets, NPCC is eyeing new markets to widen its operations, said Madhi, citing Angola, Iraq, Kazhakstan, Nigeria and south-east Asia.
To cater to new markets where major offshore projects are being launched, the firm is investing $500 million to upgrade its offshore fleet, including building new vessels.
It also wants to acquire an engineering firm in Europe or the United States to help its ability to enter new markets.
"We expect to enter the new markets by end 2012 and the acquisition could be completed by March next year," he said.
NPCC is funding its investment through equity and debt from commercial banks, he said. The firm has been active in Qatar but does not expect big contracts until 2013 due the gas-rich state's moratorium on developing new fields.
In September, NPCC along with Technip won a $500 million offshore construction contract from Abu Dhabi's Zadco.
Abu Dhabi government's General Holding Corp holds a 70 percent stake in NPCC while Consolidated Contractors Group holds the balance. - Reuters