ADNOC dishes out drilling deals worth nearly $2 bln for thousands of new wells

UAE’s Abu Dhabi National Oil Company (ADNOC) has awarded framework agreements to four oilfield services providers valued at $1.94 billion to enable drilling growth in its operations.

The awards build on ADNOC’s recent record investments in drilling-related equipment and services, support its strategy to boost crude oil production capacity to 5 million barrels per day (mmbpd) by 2030, and drive gas self-sufficiency for the UAE, ADNOC explained in a statement on Thursday.

According to the UAE’s giant, the framework agreements for wireline logging and perforation services are the largest of such awards in the oil and gas industry and were awarded to ADNOC Drilling, Schlumberger, Haliburton, and Weatherford, following a competitive tender process. Wireline logging involves continuously measuring the properties of rock formations to guide drilling operations while perforation creates tunnels in the wellbore to allow fluid to flow in from the reservoir.

The framework agreement awards cover ADNOC’s onshore and offshore fields and will run for five years with an option for a further two years. The selected companies will work to identify local manufacturing opportunities and create employment opportunities for UAE Nationals.

It is worth reminding that ADNOC Drilling, Schlumberger, and Halliburton last year secured contracts with ADNOC related to integrated rigless services across six of its artificial islands in the Upper Zakum and Satah Al Razboot (SARB) fields.

Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, said about the latest awards: “The framework agreements announced today are a continuation of ADNOC’s unprecedented investment in services to enable the expansion of drilling activity required to responsibly unlock the UAE’s leading low-cost and low-carbon intensity oil as well as the nation’s gas resources.”

ADNOC Drilling’s share of the awards is the largest and it covers services including cased hole and open hole as well as perforation. This reflects the company’s expanded service profile as a result of its transformation into a fully Integrated Drilling Services (IDS) company following the award to Baker Hughes of a 5 per cent share in the company in 2018.

As recently reported, ADNOC Drilling is only 1 rig shy of 100 following the addition of two more jack-up rigs to its offshore operations.

ADNOC pointed out that these framework agreements will support its requirement to drill thousands of new wells to expand its production capacity and remain a leading low-cost, low-carbon oil producer. The awards will also enable hundreds of millions of dollars in cost savings.