Adnoc Drilling secures contracts worth $2bn for Hail and Ghasha gas project

More than 80% of the award value will flow back into the UAE’s economy

An Adnoc drilling rig. The Hail and Ghasha project is playing a key role in the UAE's plans to achieve gas self-sufficiency. Photo: Adnoc
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Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has been awarded two contracts worth $2 billion (Dh7.49bn) linked to Adnoc's Hail and Ghasha development project.

The contracts comprise Dh4.89bn for integrated drilling services and fluids, and Dh2.6bn for the provision of four island drilling units, the company said on Wednesday.

A third contract, valued at Dh2.5bn, was also awarded to Adnoc Logistics & Services for the provision of offshore logistics and marine support services.

Overall, more than 80 per cent of the value of the awards will flow back into the UAE’s economy under Adnoc’s In-Country Value (ICV) programme.

The three contracts will cover the Hail and Ghasha drilling campaign for a maximum of ten years, Adnoc Drilling said.

“These substantial awards mark another important milestone in the delivery of the Ghasha mega-project. They also demonstrate the deep expertise and experience within Adnoc Drilling,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and managing director and group chief executive of Adnoc.

The Hail and Ghasha project is part of the Ghasha concession, which is the world’s largest offshore sour gas development and a crucial component of Adnoc’s integrated gas master plan.

It is also playing a key role in the UAE's plans to achieve gas self-sufficiency.

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Adnoc Drilling operations – in pictures

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Production from the Ghasha concession is expected to start around 2025 and increase to more than 1.5 billion standard cubic feet a day of natural gas before the end of the decade.

Four artificial islands have already been completed and development drilling is under way.

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

“Adnoc is committed to unlocking the UAE’s abundant natural gas reserves to enable domestic gas self-sufficiency, industrial growth and diversification, as well as to meet growing global gas demand”, said Dr Al Jaber.

The state-owned company's gas master plan links every part of the value chain to ensure a sustainable and economic supply of natural gas to meet the growing requirements of the UAE and international markets, through the expansion of Adnoc’s liquefied natural gas capacity.

“Abu Dhabi’s vast gas resources can play an increasingly important role in providing lower-carbon energy to meet the demands of today and tomorrow, while the world still relies on hydrocarbons,” Dr Al Jaber said.

Adnoc plans to significantly increase its investment in hydrocarbons and raise its output capacity to 5 million barrels per day by 2030.

It has awarded a number of contracts to different companies to help it fulfil this.

Last year, Adnoc's board approved plans to spend Dh466bn 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.

“This award will ensure we continuously deliver strong and sustained growth while further driving shareholder value", said Abdulrahman Al Seiari, chief executive officer of Adnoc Drilling.

Adnoc Drilling's first-quarter net income jumped by more than 59 per cent to $175 million as revenue rose 15 per cent after a strong performance by all business segments.

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

Adnoc is 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.

Updated: July 27, 2022, 1:14 PM
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