Kuwait issues second oil control system tender

Feb 18, 2002 01:00 AM

OPEC member Kuwait has issued a new tender possibly worth $ 30 mm for a Supervisory, Control and Data Acquisition (SCADA) control system for northern oilfields, which were hit last month by a huge explosion.
The tender invites 15 prequalified local firms to bid for the SCADA Phase II project, which was planned before the explosion on January 31 which killed four people and damaged a major oil and gas production complex.

The tender closes on April 4. Phase I was issued in 1999 with 30 prequalified firms mainly from the United States, South Korea, Canada, Britain, Japan, Germany and Italy. Only seven applied for the project which was budgeted at 11 mm dinars ($ 35.7 mm) and went to South Korea's Daelim 00210.KS for 5.049 mm dinars, executives said. The new tender by state-owned Kuwait Oil Co (KOC) did not give a price for the project but executives told it was budgeted at around 9 mm dinars.
"We hope Kuwait will stop with this tender the rule of taking the lowest bidder," said one executive whose firm plans to bid for the new SCADA project. "They end up with lower quality, late delivery schedules and other problems." Before resigning over the blast, oil minister Adel al-Subaih cited rules by the state's Central Tender Committee (CTC) to award contracts to lowest bidders as among the reasons behind difficulties in the vital oil sector.

Like many Western and Kuwaiti executives, Subaih said in the country's elected parliament that the oil industry should be exempted from state rules which govern other sectors. The SCADA system will help control the operation of about 195 Kuwaiti wells close to the border with Iraq.
The January blast forced Kuwait's state-run oil industry to cut total output from the north, which was at around 600,000 bpd, and cover exports from other fields and storage. The 280,000 bpd GC 15 and main gas booster station BS 130 were damaged in the blast along with a power sub-station which fed the northern operation.

Production from the north has been on a gradual rise in recent days to around 240,000 bpd with the aim of restoring it to about 320,000-350,000 bpd from two crude gathering centres, GC 23 and GC 25, unaffected by the blast, officials said. Kuwait's plans to raise total production capacity to 3 mm bpd from 2.6 mm bpd prior to the blast include a controversial project to invite oil majors to invest in and operate its northern fields to further boost actual output.
Kuwait, which controls almost 10 % of world oil reserves, has an OPEC quota of 1.74 mm bpd.

Source: Petroleumworld
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