BP, a major energy company, has awarded a new contract to Sumitomo Corporation Tubular Solutions Oman (SCTSO) for supply chain services, said a report.

Building local content into the supply chain is a key focus area in BP’s procurement strategy and this contract is expected to secure the manufacturing of piping and casing from Oman, in turn securing in-country pipe and casing support services, added the Times of Oman report.

The contract is expected to help further boost the expanding Duqm Special Economic Zone (Sezad), the report said.

BP expects to see increased efficiency in its drilling operations as a result of the move, which will see Sumitomo Corporation take over entire responsibility for inventory sourcing, management and delivery of casing, pipes and tubular for use in drilling of wells at the Khazzan field, it said.

This builds on an existing supply agreement between BP and Sumitomo Corporation and will involve the transfer of operations to Duqm, where the array of logistics and materials handling facilities will be crucial to the success of the initiative.

Sumitomo Corporation will operate a ‘just in time’ service out of Sezad, sourcing stock from Oman and Japan’s Nippon Steel Sumitomo Metal Corporation (NSSMC), holding it at Sezad and supplying it to BP’s rig sites, as and when required. This should result in streamlined inventory for BP in the field and a more cost-efficient overall process.

BP is currently developing phase 2 of its Khazzan project, Ghazeer, which is expected to come onstream in 2021 and deliver an additional 0.5 bcf/d and over 15,000 bpd condensate production.

Drilling on the first three development wells has begun, following appraisal drilling on Ghazeer last year.

An official signing ceremony took place on July 25 between representatives of BP Oman, Sumitomo Corporation and NSSMC, added the report.