Adnoc Drilling awarded $3.8bn contract

The five-year agreement is for provision of drilling, workover and well services to Adnoc Onshore

An Adnoc drilling rig in action. The company has helped customers save more than $250m since 2018 through its services. Image courtesy of Adnoc

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, agreed a five-year $3.8 billion contract with Adnoc Onshore for the continued provision of drilling, workover and other well services, the company said on Thursday.

The drilling subsidiary of Adnoc said the newly awarded contract will drive efficiency in work crews, rig move time and maintenance scheduling.

“Adnoc Onshore is a valued and long-standing customer and this contract award further extends a 50-year profitable and unique partnership," Abdulrahman Abdullah Al Seiari, chief executive of Adnoc Drilling, said in a statement to the Abu Dhabi Securities Exchange, where the company's shares trade.

"We will continue to drive value for Adnoc and the UAE, delivering on the 2030 strategic production capacity and gas self-sufficiency targets. Advanced technologies and digitalisation are at the heart of this agreement, as Adnoc Drilling continues to improve efficiencies, drive further growth opportunities, while minimising our environmental footprint.”

Adnoc Drilling raised more than $1.1 billion in September from its initial public offering. The company reported a 48 per cent increase in third-quarter net profit, backed by its onshore and oilfield services segments. Net profit climbed to $178 million, from $120m in the same period a year earlier.

Adnoc maintains its majority 84 per cent stake in Adnoc Drilling, while US energy services company Baker Hughes, which entered into a strategic partnership with Adnoc Drilling in October 2018, has a 5 per cent stake and US contract oil and gas driller Helmerich & Payne holds 1 per cent.

After its IPO, Adnoc Drilling was included in three of FTSE Russell’s global indices – the FTSE Emerging Index, the FTSE Global Large Cap Index and the FTSE All-World Index. Adnoc Drilling is the only provider of fully integrated drilling services in the region and has helped companies save more than $250m since 2018, according to the statement.

The company owns 96 rigs and is the sole provider of drilling rig hire services and certain associated rig-related services to Adnoc.

Adnoc is investing $6 billion in drilling growth as it boosts its crude oil production capacity to 5 million barrels per day by 2030.

Adnoc Drilling - in pictures

Adnoc Drilling is one of the largest drilling companies in the Middle East. Photo: Adnoc

An Adnoc Drilling rig. The company began operations in 1972 and currently operates 107 onshore, offshore and island rigs, of which 11 are rented. Photo: Adnoc

An old drill head at Adnoc's headquarters in Abu Dhabi. Khushnum Bhandari / The National

Adnoc Drilling has expanded its fleet of rigs, adding 67 since 2010, in line with the growth in oil and gas production capacity at its parent company. Khushnum Bhandari / The National

An Adnoc drilling rig. The company has achieved $2 billion in savings over the past five years through the use of technology. Photo: Adnoc

Drilling equipment on an artificial Adnoc Drilling island. Photo: Adnoc

An Adnoc employee uses a training simulator used to enhance workplace safety. Photo: Adnoc

An Adnoc artificial drilling island. The state oil company plans to raise production capacity to 5 million barrels per day by 2030. Photo: Adnoc

Adnoc Drilling made $281.6 million in net profit in the first half of 2021, with revenue hitting $1.12 billion. Photo: Adnoc

Adnoc Drilling will offer a fixed dividend of $325m for the second half of 2021. Photo: Adnoc

Equipment inspection at an Adnoc Drilling site. The company expects to increase its dividend by 5 per cent annually over the next five years, from $650m. Photo: Adnoc

Adnoc Drilling operates more than 9,600 wells across an area of 19,960 square kilometres. Photo: Adnoc