Adnoc Drilling to buy two offshore jack-up rigs for $200m to expand drilling fleet

The company plans to operate a fleet of at least 122 owned rigs by 2024

Adnoc Drilling, which is majority owned by Adnoc, owned 108 rigs at the end of September. Photo: Adnoc
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Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has signed an agreement to acquire two offshore jack-up rigs for $200 million as it expands and helps parent company Adnoc to increase its crude oil production capacity.

This latest purchase adds to previous agreements for a total of nine rigs signed in 2022 and four rigs acquired in 2021, the company said in a filing on Wednesday to the Abu Dhabi Securities Exchange, where its shares trade.

“Our objective is to be operating a total fleet of at least 122 owned rigs by 2024 and at our fleet’s current, accelerated rate of growth, we will easily surpass that milestone,” Adnoc Drilling chief executive Abdulrahman Al Seiari said.

“Our rig acquisitions will deliver exceptional revenue growth with strong profitability margins.”

Adnoc Drilling, which is majority owned by Adnoc, owned 108 rigs at the end of September. The company was listed on the ADX in October last year and has rapidly expanded operations in recent months.

It has won contracts worth $8.85 billion this year and plans to acquire dozens of rigs by 2025 to support Adnoc's oil-production capacity target of 5 million barrels per day by 2027.

Adnoc Drilling has provided integrated drilling services to Adnoc Onshore and Offshore since 2019.

The company’s highly competitive position, integrated capabilities and technical expertise have helped to increase the efficiency of Adnoc’s drilling operations.

Last month, the company reported a 6 per cent increase in third-quarter profit on the back of higher revenue from its onshore and oilfield services segments.

Net profit for the three-month period to the end of September climbed to $189 million from the same period a year earlier, while revenue during the period rose 17 per cent annually to $671 million.

“The latest acquisition … is yet another important step in the execution of our strategy to rapidly grow our business, significantly boost revenues and increase shareholder returns,” said Mr Al Seiari.

In November, Adnoc awarded three framework agreements valued at $4 billion to support its goal of increasing crude oil production amid growing global demand for oil and gas with a lower carbon intensity.

The contracts were awarded to Adnoc Drilling and US-based oilfield services providers Schlumberger NV and Halliburton Company.

The agreements, which cover Adnoc’s onshore and offshore operations, will run for five years, with an option for a further two years.

Adnoc owns an 84 per cent stake in Adnoc Drilling while Baker Hughes holds 5 per cent and US contract oil and gas driller Helmerich & Payne holds a 1 per cent stake.

The Abu Dhabi oil company has approved a Dh550 billion ($150 billion) budget for the next five years as it prepares to set up its gas subsidiary and list its shares on the ADX next year.

Adnoc’s board also endorsed plans to bring forward its 5 million bpd oil-production capacity expansion to 2027, from the previous target of 2030, as part of an accelerated growth strategy.

The company will also set up a low carbon solutions and international growth business line focused on new energy sources, gas, liquefied natural gas and chemicals.

Updated: December 14, 2022, 7:24 AM