Business Reporter –
MUSCAT, JULY 29 –
Energy major BP has awarded a new contract to Sumitomo Corporation Tubular Solutions Oman LLC (SCTSO) for supply chain services which will result in a further boost to the expanding Duqm Special Economic Zone (SEZAD).
Building local content into our supply chain is a key focus area in BP’s procurement strategy and this contract will secure manufacture of piping and casing from Omani steel securing in-country pipe and casing support services.
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.
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. “This is an important moment for both BP and Sumitomo and we are delighted to have signed an agreement that will provide value to Oman as a whole as well as ourselves. Duqm is strategically important for Oman as a special economic zone and its state-of-the-art facilities will help us create a new way of supplying services to our operations in Oman,” said Yousuf al Ojaili, BP Oman President.
“Sumitomo Corporation are excited to extend the scope of our work with BP in Oman, to include mill to well supply chain management. We believe this will bring increased added value to both BP Oman and the Sultanate of Oman,” a spokesperson for Sumitomo added.