Adnoc awards $763.7m worth of drilling contracts to boost offshore capacity

The company plans to raise oil production capacity to 5 million bpd by 2030

Abu Dhabi, UAE. March 25th 2017. The ADNOC building (C) with its main lights off during Earth Hour 2017 when, between 20:30 and 21:30, a WWF initiative encrouages residents and businesses to turn off their lights. In Abu Dhabi, Earth Hour achieved mixed results, with many buildings along the skyline keeping their lights on. Alex Atack for The National.  *** Local Caption ***  250317_EarthHour-9.jpg

Abu Dhabi National Oil Company awarded $763.7 million (Dh2.8 billion) worth of contracts to expand production from its offshore Upper Zakum and Satah Al Razboot (Sarb) fields as it aims to raise production capacity to 5 million barrels per day by 2030.

The company awarded the contracts for integrated rigless services across six of its artificial islands to Schlumberger, Adnoc Drilling and Halliburton, it said in a statement on Wednesday.

Schlumberger, the world's largest oil services company, was awarded a $381.18m contract. Adnoc Drilling's contract is valued at $228.71m and Halliburton's share is $153.87m.

"These important awards for integrated rigless services will drive efficiencies of drilling and related services, and optimise costs in our offshore operations as we ramp up our drilling activities to increase our production capacity and enable gas self-sufficiency for the UAE," said Adnoc upstream executive director Yaser Almazrouei.

Around 80 per cent of the total value of the award will flow back to the UAE's economy over the next five years as part of Adnoc's in-country value programme.

"The high in-country value generated from the awards will stimulate new business opportunities for the private sector and support the UAE’s post-Covid economic growth," Mr Almazrouei said.

The artificial islands covered by the contracts are Asseifiya, Ettouk, Al Ghallan, and Umm Al Anbar in the Upper Zakum field and Al Qatia and Bu Sikeen in the Sarb field.

Adnoc uses artificial islands to help with the production of oil and gas offshore as they help lower costs and reduce environmental impact.

It allows the company to utilise lower-cost drilling rigs used on land instead of the more expensive offshore jack-up rigs.

"These contracts are an important contributor to Adnoc Offshore’s plans to build our production capacity to over 2 million bpd in the coming years," Ahmad Al Suwaidi, chief executive of Adnoc Offshore, said.

Adnoc plans to grow its conventional drilling activity by 40 per cent by 2025 and substantially ramp up the number of its unconventional wells as part of its plans to increase capacity.

as it targets an increase in oil production capacity to 5 million bpd by the end by 2030.

The company said it achieved cost savings of $2bn by the end of 2020 through enhancing drilling efficiencies over the past five years.

Adnoc Drilling has a partnership with the US oil services provider Baker Hughes, which acquired a 5 per cent stake in the Abu Dhabi oil company's drilling unit for Dh2.02bn in 2018.

The American oilfield services company said last year it was moving the headquarters of its Surface Pressure Control Projects business to Abu Dhabi from Houston, Texas. The move follows its decision to open a wellheads unit in Abu Dhabi in 2019.

Adnoc’s latest award to the three companies followed a more integrated approach. The company’s offshore subsidiary previously awarded work using " several discrete, service-specific contracts”.

In May, Adnoc streamlined its tendering process to make it quicker and easier for companies to bid for work. The company standardised terms and conditions used for the procurement of drilling and oilfield equipment and services. This means that all of the company's pre-qualified bidders are now subject to the same agreements, which could cut the timeline for legal negotiations from months to weeks, the company said.

Updated: July 14th 2021, 9:37 AM
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