Adnoc aims to double rig fleet to reach 2018 target

Abu Dhabi National Oil Company plans to double its rig count by 2018 so it can hit a major increase in pumping capacity.

April Yee

Abu Dhabi National Oil Company (Adnoc) plans to double its rig fleet by 2018 so it can reach an ambitious pumping capacity target.

The emirate will increase its rig count to 88 from about 40 at present, mainly sourced through local companies, said Ali Al Jarwan, the chief executive of Abu Dhabi Marine Operating Company (Adma), the emirate’s main offshore operator. That increase comes as Abu Dhabi targets an increase in production capacity to 3.5 million barrels per day (bpd) by 2018 from 3 million bpd today.

"It's coming very fast," Mr Al Jarwan said at the Abu Dhabi Conference hosted by Meed, the industry publication. "We have to drill more wells because we have to increase production in a short amount of time."

The plans address concerns that Abu Dhabi would face a rig shortage at a critical time as North America’s shale industry, which requires pockmarking reservoirs with hundreds of wells, sucks rigs from the global market. More than half of the world’s active rigs were drilling in the US in November, according to the latest rig count from the oil and gas contractor Baker Hughes. Canada, which was using 385 rigs, was just three short of the Middle East’s total.

As of last month, 31 rigs were drilling in Abu Dhabi, or a little less than 1 per cent of the global fleet. The buildup in Abu Dhabi started this year with the arrival of four offshore rigs. Another six are scheduled for delivery next year. Onshore, the number of rigs will double to 50 by 2018, said Mr Al Jarwan.

The promise of more equipment is welcome news for newcomers to Abu Dhabi's oil industry like Korea National Oil Company, which has made slower progress than first planned on three blocks awarded in March of last year as it waited for rigs.

“We work with ExxonMobil, Shell, BP, Total, and newcomers have been invited by Abu Dhabi Government for small marginal fields, Korean companies and Chinese companies,” said Mr Al Jarwan. “We enjoy this open environment of diversity where we can have professionals from different teams innovate.”

The production increase comes as Abu Dhabi selects a set of new partners for its two legacy concessions, a main onshore one expiring next year and the Adma concession scheduled to expire in 2018. By that date, Adma will be able to produce 970,000 bpd, said Mr Al Jarwan.

Adnoc launched a prequalification process for companies to bid for onshore rights last year, and in October received bids from companies old and new.

“I assume the same will come to Adma within three years,” said Mr Al Jarwan.”