Adnoc Drilling signs agreement to buy two offshore jack-up rigs for $220m

The latest purchase will nearly double the company's offshore jack-up rig fleet

The new rigs, set to enter the fleet in the fourth quarter of this year, will affect the company’s revenue from 2024. Photo: Adnoc

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 $220 million as it expands its fleet.

The move aims to help parent company Adnoc increase its crude oil production capacity.

The new rigs, set to enter the fleet in the fourth quarter of this year, will affect the company’s revenue from 2024, Adnoc Drilling said in a statement to the Abu Dhabi Securities Exchange.

It said the latest purchase will nearly double Adnoc Drilling’s offshore jack-up rig fleet from early 2021 levels as part of the company’s plan to grow its overall fleet to 142 owned rigs by next year.

The company currently operates 115 rigs.

“The acquisition of these premium jack-up rigs will support one of our major customers, Adoc Offshore, with its drilling and completion services requirements, as it delivers accelerated production capacity,” said Abdulrahman Al Seiari, chief executive of Adnoc Drilling.

“It is the next step in the execution of our strategy to rapidly grow our business, significantly boost revenue and increase shareholder returns.”

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.

The company will focus more on the UAE’s unconventional oil and gas resources this year, Mr Al Seiari told The National in an interview last month.

“We have been doing unconventional for the last five years but not to the depth which will potentially [be seen] in the coming months and the years to come,” he said.

“It's an area that is [a] big focus for today … because [it] is going to be one of the main additional sources for oil and gas [in the future].”

Abu Dhabi’s unconventional recoverable oil resources are estimated at 22 billion barrels, comparable to Adnoc’s flagship lower-carbon Murban grade.

Last month, Adnoc Drilling signed an agreement to acquire six newbuild hybrid power land rigs for $75 million as part of its decarbonisation strategy.

In April, the company signed an agreement to buy 10 newbuild hybrid power land drilling rigs for $252 million.

The company reported a 25 per cent rise in first-quarter net profit, to $218.6 million, as the addition of new land rigs into the fleet boosted revenue. Revenue during the reporting period rose by 19 per cent to $716 million mainly due to new land rigs entering the operational fleet in the second half of 2022.

Updated: June 06, 2023, 8:03 AM