KCA Deutag to build 4 new rigs in Oman for contract with PDO

Petroleum Development Oman (PDO) has awarded KCA Deutag a 10-year contract for the provision of drilling services with four new highly automated rigs that will be built in the Sultanate of Oman. The contract comes with options to extend for a further two years and, with those options included, has a total value around $550 million. The rigs will be constructed by International Drilling Technology (IDTEC) in Oman. IDTEC is KCA Deutag Group’s local rig manufacturing and servicing company. The rigs will be the first of their kind to be constructed in Oman.

KCA Deutag will invest approximately $100 million to build the new rigs in Oman and expects to commence operations in the second half of 2023. Around 40% of this value will be spent with Omani suppliers, including local small and medium enterprise (SME) companies.

The project has high in-country value (ICV) and will provide many benefits to the local economy and community, including:

• Securing employment for existing and additional resources at IDTEC across the 18- month build period.
• Subcontracting of significant work, including machining, construction and commissioning to Omani SMEs.
• Establishment of IDTEC as an API-licensed manufacturer for rig structures in Oman, with long-term opportunities for skilled jobs to support this and future projects.
• Training and upskilling of Omani personnel during the construction phase. This includes building skills of, and transfer of knowledge to, Omani personnel – focusing on engineering, operation and maintenance of mechanized and automated rigs to achieve 100% Omani crews after four years of operation.

In addition to training its own employees in operation of the rigs, KCA Deutag will:

• Extend the opportunity to partake in the training, knowledge transfer and rig construction to personnel from other drilling companies, developing the skills and competencies in the operation and maintenance of modern, high-tech equipment of a further 10 local people; and
• Offer summer internships to 16 undergraduates from Omani universities to be involved in the design, construction and commissioning of the rigs. KCA Deutag Energy will then offer employment to at least four of these undergraduates upon course completion.

The ICV benefits will continue throughout the life of the contract, securing employment for approximately 190 jobs.

The rig design and all key components will be provided by KCA Deutag’s new business unit, Kenera, through its Bentec engineering and manufacturing center.

“Awarding this contract to KCA Deutag is a key step in establishing local rig manufacturing capabilities, especially for mechanized rigs capitalizing on PDO journey to modernize its rigs fleet. This will also come with an opportunity to train and develop local Omanis in the design and manufacture of mechanized rigs, in addition, to supporting Omani SMEs and providing job opportunities for Omanis. It is a step change in the country to have locally manufactured light rigs for PDO,” said Mohammed Al Rashdi, PDO Well Engineering Director.

“KCA Deutag has been operating in Sultanate of Oman and working for PDO for almost 60 years, and we are delighted to have been awarded this opportunity to continue this long-standing relationship. This investment demonstrates our commitment to PDO and the Sultanate of Oman to deliver outstanding in-country value with the first four rigs constructed locally. It is also validation of our excellent safety record, incident-free operations and technological performance – as well as an opportunity to deliver energy-efficient rigs that benefit from our fuel optimization technology and are capable of adopting grid and hybrid technologies in the future,” said Simon Drew, President of KCA Deutag’s Land Operation.