Adnoc Drilling has signed a five-year preliminary agreement with Abu Dhabi’s clean energy company Masdar to explore partnerships and investments in geothermal energy.
The companies will assess potential co-operation in areas such as development, investment, operations and projects to promote the energy transition in the UAE and other markets, Adnoc Drilling said on Tuesday.
Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, will engage as a technical expert and adviser to support Masdar’s geothermal energy projects around the world.
The companies will “jointly evaluate” the potential for Adnoc Drilling to provide geothermal drilling services.
“Geothermal energy has enormous global potential and energy developers are challenged to ensure smart and innovative ways to deliver cost-effective wells,” said Abdulrahman Al Seiari, chief executive of Adnoc Drilling.
“Our leading integrated drilling services offering can bring advanced, efficient start-to-finish drilling and completion technologies to [give] Masdar the potential to generate clean geothermal energy to cool thousands of homes and office buildings.”
Geothermal energy harnesses the heat generated within the Earth’s core to provide a constant energy source, unlike solar or wind, which are intermittent in nature.
Geothermal energy plants also have high-capacity factors, meaning they can run at maximum power for longer periods.
Last month, Masdar invested in Pertamina Geothermal Energy (PGE), a unit of Indonesia's state utility Pertamina.
The investment marked Masdar’s entry into the South-East Asian country’s geothermal energy sector, the second largest after the US.
Masdar's chief executive Mohamed Al Ramahi said the agreement with Adnoc Drilling reinforced his company's commitment to unlocking clean energy opportunities across a wide technology range.
“With Masdar recently adding geothermal energy to our growing clean energy portfolio, we are excited about the important role that geothermal can play in helping to drive forward the global energy transition,” he said.
The generation of electricity using geothermal energy has increased gradually by about 3.5 per cent every year, resulting in a total installed capacity of about 15.96 gigawatts in 2021, according to the Abu Dhabi-based International Renewable Energy Agency.
However, geothermal energy still only makes up 0.5 per cent of the total installed capacity for renewable energy sources used in generating electricity, heating and cooling globally, the agency said in a report last month.
Masdar is currently active in more than 40 countries and has invested or committed to invest in projects worth more than $30 billion.
The company, which continues to boost its clean energy portfolio, has an ambitious target to grow its capacity to at least 100 gigawatts of renewable energy capacity globally by 2030.
The largest share of this capacity will come from wind and solar technology.
Beyond the initial goals, Masdar also seeks to develop more than 200 gigawatts of renewable energy.
Adnoc Drilling has provided integrated drilling services to sister companies Adnoc Onshore and Adnoc Offshore since 2019.
Last year, the company said it was considering expanding within the GCC as drilling activity increased after a surge in crude oil prices.
Rig activity in the GCC is a “huge” area in which Adnoc Drilling can “easily perform”, Mr Al Seiari told The National in November.
Adnoc Drilling generates $2bn in cost savings partly due to its adoption of digital tech
