Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has signed an agreement to acquire six newbuild hybrid power land rigs for $75 million, as it expands and helps parent company Adnoc to increase its crude oil production capacity.
Built by Honghua Golden Coast, the new rigs will enter the fleet from the second quarter of next year. They will contribute partial revenue and ebitda (earnings before interest, taxes, depreciation and amortisation) from 2024 and full year contribution from all rigs in 2025, Adnoc Drilling said on Wednesday.
“As we implement our bold fleet expansion plan, we are working to ensure that growth comes with the delivery of our decarbonisation commitments,” said Abdulrahman Al Seiari, chief executive of Adnoc Drilling.
With the latest purchase and following an announcement in March detailing an agreement for 10 newbuild hybrid power rigs, the company has ordered 16 newbuild hybrid power land rigs so far this year.
These rigs “are central to Adnoc Drilling’s rigorous decarbonisation strategy and our commitment to support Adnoc’s target to reduce greenhouse gas intensity by 25 per cent by 2030”, Mr Al Seiari said.
Adnoc Drilling said last year it was considering expanding within the GCC as drilling activity increased after a surge in crude oil prices.
The newbuild rigs are part of the company's medium-term guidance to get to an owned-rig count of 142 by the end of 2024, it said.
The new rigs use a high-capacity battery and engine automation in parallel with the rigs’ traditional diesel generators. The hybrid power technology system stores energy in its batteries to use when there is a need for continuous power or to provide instant extra power when there is an increase in demand, reducing a rig’s greenhouse gas emissions by up to 15 per cent compared to a traditional rig.
Each of the rigs will have the provision to be connected to the electrical grid with minimum adjustment, depending on rig location and the availability of grid power, further reducing emissions, the company said.
Adnoc Drilling has provided integrated drilling services to sister companies Adnoc Onshore and Adnoc Offshore since 2019. It has been expanding operations as parent company Adnoc looks to boost its production capacity to 5 million barrels per day by 2027.
Adnoc Drilling generates $2bn in cost savings partly due to its adoption of digital tech
In November, the company was awarded three framework agreements valued at $4 billion.
It also secured a $980 million contract from parent company Adnoc to hire two jack-up offshore rigs, associated manpower and equipment.
In August, it was awarded two contracts worth $1.5 billion and $1.9 billion by Adnoc Offshore to boost production capacity.
It also received two contracts worth $2 billion linked to Adnoc's Hail and Ghasha development project in July.
Adnoc Drilling posted a 25 per cent rise in first-quarter net profit, as addition of new land rigs into the fleet boosted revenue, with the company's net income for the three months to the end of March rising to $218.6 million.