Muscat: The expanding Special Economic Zone in Duqm (Sezad) is expected to get a boost from the supply chain services contract awarded by BP to Sumitomo Corporation Tubular Solutions Oman (SCTSO).
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 production of piping and casings from Omani steel, in turn 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 the entire responsibility of inventory sourcing, management, and delivery of casing, pipes, and tubing for use in the drilling of wells at the Khazzan field.
This builds on an existing supply agreement between BP and Sumitomo 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 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 billion cubic feet per day and over 15,000 barrels per day in 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,” said Yousuf Al Ojaili, BP Oman President. “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.”
“Sumitomo Corporation are excited to extend the scope of our work with BP in Oman, to include mill to well supply chain management,” said a spokesperson for Sumitomo. “We believe this will bring increased added value to both BP Oman and the Sultanate of Oman.”