Adnoc Drilling secures $1.53bn contract to boost Adnoc's offshore operations

More than 80% of the contract value will flow back into the UAE economy through Adnoc's In-Country Value programme

Adnoc Drilling is supporting the expansion of the offshore operations of parent company Adnoc. Photo: Adnoc Drilling
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Adnoc has awarded a $1.53 billion contract to Adnoc Drilling to support the expansion of the parent company's offshore operations and its goal of boosting crude oil production capacity to five million barrels per day by 2030 amid growing global demand for oil and gas with a lower carbon intensity.

The two-year contract awarded by Adnoc Offshore covers the provision of 12 jack-up rigs, two island rigs and the associated integrated drilling services, the state oil company said on Monday.

More than 80 per cent of the award value will flow back into the UAE economy under Adnoc’s In-Country Value programme.

“Contracts like this help ensure we continuously deliver strong and sustained growth, while further driving shareholder value, and our ambitious rig fleet expansion programme, to which we have made a significant capex commitment, is making the delivery of such contracts possible," said Abdulrahman Abdullah Al Seiari, chief executive of Adnoc Drilling.

“Our status as a key enabler of Adnoc’s production capacity expansion targets, offers investors a solid opportunity for sustained and predictable revenue growth, coupled with market leading cash flows and profitability margins, enabling our progressive dividend policy.”

Adnoc Drilling is the largest national drilling company in the Middle East by rig fleet size, owning 105 rigs as of July 31 and expecting two new rigs to commence operations by the end of 2022.

The most recent award will leverage Adnoc Drilling's start-to-finish offering, as well as the company's scale to drive value and efficiencies while minimising environmental impact, the parent company said.

Adnoc Drilling listed on the ADX last October and has rapidly expanded operations in recent months.

In August, it was awarded two contracts worth $1.5bn and $1.9bn by Adnoc Offshore to boost production capacity. It also received two contracts worth $2bn linked to Adnoc's Hail and Ghasha development project in July.

“Adnoc Offshore will continue to responsibly harness the energy in Abu Dhabi’s waters, as we increase production capacity to meet the world’s growing demand for energy with lower carbon intensity oil and gas,” said Yaser Almazrouei, Adnoc's upstream executive director.

“Adnoc Drilling is a world leader in drilling and completion services. Their deep expertise and wide technical capability will maximise value and minimise the environmental footprint of every well as Adnoc expands its production capacity.”

The award will support the expansion of Adnoc’s crude oil production capacity and gas self-sufficiency for the UAE.

Adnoc Drilling has provided integrated drilling services to Adnoc Offshore since 2019. The company’s highly competitive position, integrated capabilities and technical expertise have helped to increase the efficiency of Adnoc’s offshore operations.

The company said it enabled more than $250 million in savings for its customers through the successful end-to-end delivery of drilling and completion services since it launched its integrated drilling services offering in 2018.

Adnoc is the company's majority shareholder, with an 84 per cent stake, while 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.

Updated: October 10, 2022, 7:19 AM