Petrofac has revealed that Abu Dhabi National Oil Company (ADNOC) has terminated the $1.65 billion worth of contracts it had awarded for the Dalma Gas Development Project located offshore Abu Dhabi, UAE. The contract was awarded two months ago.

According to a statement from the service provider, it said that it has received a notice of termination from ADNOC regarding the Dalma contracts. Petrofac’s statement read: “Petrofac is committed to working with ADNOC over the coming weeks to explore alternative options to deliver this project in a way that supports their strategic objectives within the current challenging environment.”

Petrofac Emirates, a joint venture between Petrofac and Mubadala Petroleum, would have carried out the work on the Dalma project, which was awarded in two packages. It included the construction of a gas processing facility on an island in the Persian Gulf over the next three years. Meanwhile, the engineering, construction and installation work on the platforms was to be carried out jointly by Petrofac and Sapura Energy.

The Dalma Gas Development Project is operated and 60 per cent owned by ADNOC, while Eni owns a 25 per cent stake, and Wintershall taking 10 per cent, and OMV owning 5 per cent. The development is an important part of the Ghasha ultra-sour gas concession, which is a crucial element of ADNOC’s strategic objective to make the UAE gas self-sufficient.

Petrofac’s statement added that it was working through its $7 billion backlog and is tendering for other projects in Abu Dhabi.