Adnoc awards three contracts worth $4bn for drilling-related services

More than 80 % of the awards value could flow back into the UAE’s economy under Adnoc’s In-Country Value programme

Adnoc's Lower Zakum project. The state-owned oil company is looking to boost its production capacity to 5 million bpd by 2030. Photo: Adnoc
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Adnoc has awarded three framework agreements valued at $4 billion (Dh14.68bn) to support its goal of boosting crude oil production capacity to five million barrels per day by 2030 amid growing global demand for oil and gas with a lower carbon intensity.

The contracts were awarded to Adnoc Drilling and US-based oilfield services providers Schlumberger NV and Halliburton Company. The agreements, which cover Adnoc’s onshore and offshore operations, will run for five years, with an option for a further two years.

More than 80 per cent of the award value could flow back into the UAE’s economy under Adnoc’s In-Country Value programme, said Adnoc in a statement on Tuesday.

“These record framework agreements for integrated drilling fluids services continue Adnoc's significant investment in drilling-related services to enable the expansion of our production capacity,” Yaser Almazrouei, Adnoc's upstream executive director, said.

Adnoc Drilling’s scope of the agreements is valued at up to $1.6bn.

In separate statement on Wednesday, Adnoc Drilling said the award will boost its oilfield services revenue by an additional $750 million.

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, said it secured contracts worth $8.85bn in 2022.

It has has provided integrated drilling services to Adnoc Offshore since 2019. The company’s highly competitive position, integrated capabilities and technical expertise have helped to increase the efficiency of Adnoc’s offshore operations.

Adnoc is the company's majority shareholder, with an 84 per cent stake. Baker Hughes holds 5 per cent, while US contract oil and gas driller Helmerich & Payne holds a 1 per cent stake.

The latest agreements will enable “hundreds of millions of dollars” in cost savings through the company’s optimised procurement approach, which focuses on longer-term contracts with an optimal number of suppliers that can reliably deliver at competitive rates, said Adnoc.

Since November last year, the company has awarded over $16bn in agreements for drilling-related equipment and services.

The average ICV of all of these awards combined amounts to 70 per cent value flowing back into the UAE economy, the company said.

“We are prioritising in-country value as we respond to growing global demand for energy and these agreements will create skilled job opportunities for UAE Nationals in the private sector, drive domestic manufacturing and support the UAE’s industrial growth,” Mr Almazrouei said.

Updated: November 02, 2022, 6:04 AM