McDermott Sub Gets Conditional LOA for $2B Contract

A consortium of a subsidiary of McDermott International and Sinopec International Petroleum Service Corporation announced Wednesday that it has received a conditional letter of award for a future contract, valued at approximately $2 billion, from Total for the Tilenga project.

McDermott noted that a formal contract award remains subject to the Tilenga partners’ approval. Under the contract, the consortium would provide engineering, procurement, construction, and commissioning services for the development of an onshore oil field that will generate up to 200,000 barrels per day, McDermott outlined. The project would be led from McDermott’s offices in London and Sinopec’s office in Yangzhou, before transitioning to Uganda for construction activities.

Located in the Lake Albert Basin in the Republic of Uganda, the Tilenga project is said to be the centerpiece of oil projects projected to bring investments of over $10 billion to Uganda and Tanzania. Tilenga includes six oil fields and will feature 426 oil wells at full production, McDermott highlighted.

The project will stimulate economic growth in Uganda and create up to 20,000 direct and indirect jobs, according to McDermott, which said it is committed to implementing these projects in a manner that fully addresses the sensitive environmental context and the needs of all stakeholders in the area.

“This is a first step which allows launching the detailed engineering and procurement activities before the final approval by the partners,” Tareq Kawash, McDermott International’s senior vice president for Europe, the Middle East, and Africa, said in a company statement.

“This prestigious project demonstrates the continuity and strength of our business relationship with TotalEnergies and their partners CNOOC International of China and Uganda National Oil Company (UNOC),” he added in the statement.

“This is a momentous and essential project for Uganda for the development of its national companies and citizens—and as we continue to grow our footprint in Africa, we are committed to expanding local content opportunities in the communities in which we operate,” Kawash went on to say.

McDermott’s group senior vice president for projects, Samik Mukherjee, said, “this important step further strengthens years of successful collaboration with TotalEnergies on a wide portfolio of world-class projects in the offshore, petrochemicals and LNG segments—where TotalEnergies is a major stakeholder”.

Source: RigZone