McDermott's multi-billion dollar EPC contracts are formally cancelled by Aramco

Saudi Aramco has officially terminated the bidding process for three offshore contracts initially granted to McDermott International, a Houston-based offshore contractor, as part of the extensive Zuluf oilfield expansion project. These engineering, procurement, and construction (EPC) contracts, valued at over $1.8 billion collectively, were intended for the further development of Aramco's Zuluf oilfield.

The decision to cancel the contracts arises from McDermott's inability to furnish the necessary performance bank guarantees required by the Saudi state-owned oil and gas giant. Upstream reports that Aramco informed all key bidders on Monday about the cancellation of the bid process for contract release and purchase orders (CRPOs) 99, 100, and 101.

It is noteworthy that McDermott holds a position within Aramco's long-term agreement (LTA) group, comprising international contractors eligible to bid for maintenance and expansion projects in some of the company's largest offshore oilfields. The termination of the Zuluf tenders raises concerns about potential delays in the significant oilfield expansion initiative, as stated in the report.