Adnoc Drilling buys two offshore jack-up rigs to expand its drilling fleet

The rigs are expected to start operations in the third quarter of 2022

An Adnoc rig. The net income of the company's drilling subsidiary hit $175 million in the first quarter. Photo: Adnoc

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has bought two premium offshore jack-up rigs as it expands and helps parent company Adnoc to boost its crude oil production capacity.

The company signed a sale-and-purchase agreement to acquire the drilling units from Well Target Five and Well Target Six, Adnoc Drilling said in a statement on Monday to the Abu Dhabi Securities Exchange, where its shares are traded.

Since listing on the Abu Dhabi bourse last October, Adnoc Drilling has expanded its fleet to 104 owned rigs as of March 31 from 96.

“This is another important step in our fast-paced expansion and growth programme, and to meet the growing demand to achieve Adnoc’s ambitious goals of increasing its oil production capacity and achieving gas self-sufficiency for the UAE,” said Abdulrahman Al Seiari, chief executive of Adnoc Drilling.

The drilling units are expected to join Adnoc's Drilling fleet and start operations in the third quarter of 2022.

Adnoc aims to remain one of the lowest-cost producers and lowest carbon emitters in the oil and gas industry even as it increases its crude production capacity.

It plans to achieve gas self-sufficiency for the UAE, as well as expand its downstream business and strengthen its trading capabilities.

The state oil producer also plans to significantly increase its investment in hydrocarbons and will raise its output capacity to 5 million barrels per day by 2030.

It has awarded a number of contracts to different companies to increase its production.

Last year, Adnoc's board approved plans to spend Dh466 billion between 2022 and 2026 to expand its upstream production capacity and downstream portfolio, as well as its low-carbon fuels business and clean energy ambitions.

It also revealed a “significant” increase in national reserves of 4 billion stock-tank barrels (STB) of oil and 16 trillion standard cubic feet of natural gas.

The company also made new oil discoveries at Bu Hasa, the emirate’s biggest onshore field, as well as at the onshore Block 3 and Al Dhafra Petroleum Concession, Adnoc said earlier this month.

Adnoc Drilling's first-quarter net income jumped by more than 59 per cent to $175 million as revenue climbed 15 per cent on the back of strong performance from all business segments.

The company raised more than $1.1 billion last year from its initial public offering, which was oversubscribed more than 31 times.

State-owned oil and gas company Adnoc remains the company's majority shareholder, with an 84 per cent stake.

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