Adnoc awards $1.83bn of agreements for drilling-related services

The contracts cover Adnoc's onshore and offshore fields and are aimed at expanding its production capacity

The Adnoc agreements, awarded to five companies, will run for five years with an option for a further two years. Photo: Adnoc

Abu Dhabi National Oil Company awarded five framework agreements valued at $1.83 billion to boost drilling activity in the emirate's oilfields as the company focuses on expanding production capacity to help meet growing demand for energy globally.

The agreements for “directional drilling and logging while drilling” were awarded to five companies and are the “largest of their kind” in the oil and gas industry, Adnoc said in a statement on Wednesday.

Al Ghaith Oilfield Supplies and Services Company, Al Mansoori Directional Drilling Services, Schlumberger Middle East, Haliburton Worldwide Limited Abu Dhabi and Weatherford Bin Hamoodah Company won the awards following a competitive tender process.

The awards cover Adnoc’s onshore and offshore fields and will run for five years with an option for a further two.

“As Adnoc responds to rising global energy demand, we are responsibly ramping up drilling activities to further unlock Abu Dhabi’s oil and gas resources which have some of the lowest carbon intensity in the world,” Yaser Almazrouei, Adnoc's upstream executive director, said.

“These awards build on our continuing investments in drilling services and they will deliver substantial in-country value for the nation to support economic growth and diversification.”

More than 75 per cent of the award value could flow back into the UAE economy under Adnoc’s In-Country Value programme over the duration of the agreements, the company said.

Directional drilling and logging while drilling entails controlling the direction and deviation of a wellbore while drilling to access oil and gas resources and measuring formation properties to enhance production, according to the statement.

Adnoc is “optimising its procurement approach to reflect market dynamics, focusing on long-term contracts with an optimal number of suppliers that provide stable and reliable delivery at highly competitive rates”, the company said.

Since November 2021, it has awarded drilling agreements worth over $11bn to contractors for wellheads and related components, downhole completion equipment and related services, liner hangers, cementing services, wireline logging and directional drilling.

“The framework agreement awards will support Adnoc’s requirement to drill thousands of new wells to expand its production capacity to five million barrels per day by 2030, enable gas self-sufficiency for the UAE and remain a leading low-cost, low-carbon oil producer,” the statement said.

“The awards will also enable hundreds of millions of dollars in cost savings.”

Earlier this month, Adnoc awarded two contracts worth more than $3.4bn to its drilling unit to boost offshore production capacity.

It also signed a $1.17bn contract with its logistics and services unit to boost production.

In July, Adnoc announced a second discovery of natural gas in 2022 in the first exploration well in Abu Dhabi’s Offshore Block 2 exploration concession operated by Eni.

The discovery from a new, deeper reservoir indicates the presence of one trillion to 1.5 trillion standard cubic feet of raw gas, almost doubling the discovered field volume, Adnoc said at the time.

Adnoc's board approved plans last year to spend Dh466bn ($126.88bn) 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.