Thursday August 04, 2022

Adnoc Drilling awarded more than $3.4 billion in contracts

Adnoc Drilling awarded more  than $3.4 billion in contracts

Over 80% of the value of the awards will flow back into the UAE’s economy under Adnoc’s In-Country Value programme.

Abu Dhabi National Oil Company (Adnoc) announced on Thursday two contracts totalling more than $3.4 billion (Dhs12.6 billion) have been awarded to Adnoc Drilling to hire 8 jack-up offshore rigs. The contracts, valued at $1.5 billion (Dhs5.6 billion) and $1.9 billion (Dhs7 billion) respectively, awarded by Adnoc Offshore, will support the expansion of Adnoc’s crude oil production capacity to five million barrels per day (mmbpd) by 2030 and enable gas self-sufficiency for the UAE.

Over the life of the 15-year contracts, Adnoc Drilling’s state-of-the-art rig fleet will enable Adnoc and its strategic international partners to further unlock Abu Dhabi’s offshore oil and gas resources, creating significant value for Adnoc, its partners and the UAE.

Over 80% of the value of the awards will flow back into the UAE’s economy under Adnoc’s successful In-Country Value (ICV) programme, supporting local economic growth and diversification.

Dr Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and Adnoc Managing Director and Group CEO, said: “This world-leading investment will significantly expand our drilling activity to accelerate growth, drive value and responsibly unlock the UAE’s resources in response to globally rising demand for energy.

Adnoc Drilling’s state-of-the-art fleet and market-leading capabilities, will be a key enabler as Adnoc strengthens its position as a leading low-cost and low-carbon energy producer. We are focused on delivering on our 2030 strategy, in support of the directives of our wise leadership to grow and diversify the UAE’s economy.”

The jack-up rigs will be hired along with manpower and equipment to support drilling operations across Adnoc’s offshore fields, which account for about half of Adnoc’s production capacity. Adnoc Drilling is the largest national drilling company in the Middle East by rig fleet size, with 105 owned rigs, including 27 offshore jack-up units, one of the largest operational jack-up fleets in the world.

The company’s expansive rig fleet and market leading expertise remain key drivers in its ability to win and service large-scale drilling contracts for customers such as Adnoc Offshore, and to enable the unlocking of significant potential in Abu Dhabi’s waters.

Adnoc recently awarded Adnoc Drilling two further substantial contracts totalling $2 billion (Dhs7.49 billion) for integrated drilling services and the provision of Island Drilling Units at its Hail and Ghasha Gas Development

The contracts comprise $1.3 billion (Dhs4.89 billion) for integrated drilling services and fluids and $711 million (Dhs2.6 billion) for providing four Island Drilling Units. A third contract, valued at $681 million (Dhs2.5 billion), was also awarded to Adnoc Logistics & Services for providing offshore logistics and marine support services.

Overall, more than 80% of the value of the awards will flow back into the UAE’s economy under Adnoc’s successful In-Country Value (ICV) program and all three of the contracts will cover the Hail and Ghasha drilling campaign for a maximum of ten years.

The Hail and Ghasha Development Project is part of the Ghasha Concession, which is the world’s largest offshore sour gas development and a key component of Adnoc’s integrated gas masterplan as well as an important enabler of gas self-sufficiency for the UAE.

Adnoc’s gas masterplan links every part of the gas value chain to ensure a sustainable and economic supply of natural gas to meet the growing requirements of the UAE and international markets, through expansion of Adnoc’s liquiefied natural gas (LNG) capacity. The plan includes the application of new approaches and technologies to enable increased and competitive gas recovery from existing fields as well as developing untapped resources and leveraging innovation to continually drive emissions reduction.

Production from the Ghasha Concession is expected to start around 2025, ramping up to produce more than 1.5 billion standard cubic feet per day (scfd) of natural gas before the end of the decade. Four artificial islands have already been completed, and development drilling is underway.

In November last year, Adnoc and its partners awarded two Engineering, Procurement & Construction (EPC) contracts for the Dalma Gas Development Project, within the Ghasha Concession. They also awarded a contract to update the Front-End Engineering and Design (FEED) for the Hail and Ghasha project. The updated design is expected to be completed by the end of the year and will further optimize costs and timing, as well as potentially accelerate the integration of carbon capture.

Adnoc Drilling Company also announced recently that it has signed a Sale and Purchase Agreement (SPA) to acquire an additional two premium offshore jack-up drilling units. The investment is central to the Company’s enterprising expansion strategy and forms part of its three-year guidance on capital expenditure.


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