Oman signs $1.2bn pipe supply contract with Sumitomo

Petroleum Development Oman (PDO) signed on Thursday (January 26) a $1.2 billion contract to supply piping for its drilling operations through Duqm.

The five-year deal with Japanese supplier Sumitomo further includes a new supply yard in the Duqm Special Economic Zone, which will be a logistics centre for materials being delivered to PDO’s drilling locations.

The agreement will confirm PDO as an anchor tenant at Duqm from mid 2018, with up to two shipments a week (carrying 3,000 metric tonnes of pipe) being routed through the port for its oil and gas fields.

The logistics hub will provide integrated supply chain management services, such as storage, planning and delivery, and 30 trucks a day will be needed to transfer the pipes from the new supply yard to PDO’s drilling locations.

The move will significantly build capability at Duqm to become the primary logistics hub for the



Sultanate’s oil and gas sector and complements the Tanfeedh programme on economic diversification.

PDO managing director Raoul Restucci said: “This contract will spur the growth of Duqm and attract even more business as the port demonstrates its ability to handle major operations.”

“Every year, we drill 600 wells across our concession area and all the piping for that will be managed at Duqm.

“This agreement is further evidence that PDO’s In-Country Value (ICV) programme to retain more of the oil and gas industry’s wealth in the Sultanate by creating Omani jobs and developing local capability and infrastructure is going from strength to strength,” he added.

The new agreement is a renewal of an existing contract to supply PDO oil tubular goods, casing and tubing pipes used for drilling, and consolidates the Company’s long-standing business relationship with Sumitomo.