NPCC sees opportunities in ADNOC oil projects
Published Date : 21, Dec 2011
ABU DHABI: 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
"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
The firm has had a difficult 2011, facing stiff competition from
price competitive Asian contractors actively bidding for projects across
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 neighboring markets, NPCC
is eyeing new markets to widen its operations, said Madhi, citing
Angola, Iraq, Kazakhstan, Nigeria and Southeast 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
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.