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ROV NEWS: Operator says awards process was transparent

Posted on 19.12.2003 - 03:16 EST in ONSHORE NEWS by Rons_ROV_Links

Canadian oil and gas company EnCana yesterday defended its decision to award to Spain a multi-million-pound contract for the Buzzard oil field in the North Sea.

The firm confirmed that the 10,700-tonne production deck will be built by Dragados, at Cadiz in Spain.

Buzzard, 60miles north-east of Aberdeen, is the largest oil field discovered in the North Sea in the last decade.

EnCana is operator of the development, which will have three bridge-linked steel platforms and be developed at a cost of £1.35 billion.

News that the production deck project had gone abroad was greeted with disappointment.

SNP Westminster leader Alex Salmond, MP for Banff and Buchan, said it was disappointing that such a valuable piece of work was going to be generating jobs elsewhere in Europe.

Jake Molloy, general secretary of the OILC offshore workers' union, said it was the latest in the long line of North Sea projects passed to other areas of the world.

Graham Tran, regional officer with the Amicus union, called the Dragados contract award a slap in the face for the UK contracting and supply sector.

He added: "Only last week, the Government announced assistance for new entrants into the North Sea.

"If this is a sign as to how new operators welcome such news, then they'd better think again.

"I fear EnCana's decision could seriously jeopardise Government thinking in years ahead when the industry asks for assistance."

However, a spokesman for EnCana in Britain said that Buzzard contracts were awarded in a fully transparent and audited process.

It also said yesterday that Heerema was to make the 9,700-tonne utilities deck in Hartlepool. This work is worth around £45million.

Burntisland Fabrications has already won the contract for the 3,700-tonne wellhead deck, to be constructed at Burntisland and Methil, in Fife.

However, the production deck work in Spain is believed to be by far the most valuable award at around £60million.

Asked if cost had been the main consideration when allocating projects, the EnCana spokesman said this was only one among a number of factors.

"Cost and delivery record (of the successful yard) are probably the two most important factors," he added and pointed out that the UK had been successful in winning two out of three of the deck contracts.

He said: "If the UK was fully competitive for everything, we could award everything to the UK."

A spokesman for the Department of Trade and Industry said it was pleased to see that British workers would benefit from the opportunities Buzzard was bringing.

Asked about the production deck contract going to Spain, he said: "Obviously, EnCana has to make commercial decisions, but we should not be detracting from the fact that Buzzard and everything it means for the UK Continental Shelf is very encouraging."

Amec's yard on Tyneside was one of the unsuccessful bidders for both deck contracts announced yesterday. Its spokesman said: "We thought our bids were technically excellent. We are hoping to have feedback from EnCana as to why we were not selected."

More than 500 people are employed in Amec's Tyneside yard and the spokesman said losing out on the Buzzard work would have no impact on jobs in the short term.

However, Heerema was yesterday celebrating landing the contract for the utilities deck.

The project could lead to up to 350 new jobs at the Hartlepool yard, on top of its existing workforce of 450.

Heerema Hartlepool director Brian Dixon said: "We are absolutely delighted to be awarded this prestigious contract, as it is the first large integrated deck to be awarded to a UK contractor for over five years."

Sub-contractors in the Hartlepool area are also expected to benefit from the project.

EnCana also said yesterday that Saipem UK had been awarded the contracts for pipelaying and the transport and installation of the Buzzard jackets and topsides.

Other work, including the accommodation module, flares and bridges, will be tendered in 2004.

There are thought to be around 1.2billion barrels of oil in place at Buzzard, with total recoverable reserves estimated at more than 400million barrels. First production is expected by the end of 2006.


09:00 - 19 December 2003

Source: This is North Scotland

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