UAE oil & gas giant hands out five ‘largest-of-its-kind’ drilling deals
UAE’s giant Abu Dhabi National Oil Company (ADNOC) has awarded framework agreements described as “largest-of-its-kind” totalling $1.83 billion (AED 6.72 billion) for drilling-related services to five firms.
While announcing the award of five framework agreements valued at $1.83 billion for directional drilling and logging while drilling (LWD), ADNOC revealed on Wednesday that this will support its efforts to expand the production capacity of its low-carbon oil and gas resources in a bid to help meet the world’s growing demand for energy.
The UAE player outlined that these five deals are “the largest of such awards in the oil and gas industry.” Following a competitive tender process, the framework agreements were awarded to Al Ghaith Oilfield Supplies and Services Company, Al Mansoori Directional Drilling Services (Al Mansoori), Schlumberger Middle East S.A (Schlumberger), Haliburton Worldwide Limited Abu Dhabi (Haliburton) and Weatherford Bin Hamoodah Company LLC (Weatherford).
Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, remarked: “As ADNOC responds to rising global energy demand, we are responsibly ramping up drilling activities to further unlock Abu Dhabi’s oil and gas resources which have some of the lowest carbon intensity in the world. These awards build on our ongoing investments in drilling services and they will deliver substantial in-country value for the nation to support economic growth and diversification, in line with the UAE Leadership’s wise directives.”
Furthermore, ADNOC elaborated that these awards cover its onshore and offshore fields and will run for five years with an option for a further two years. Under the firm’s In-Country Value (ICV) programme, over 75 per cent of the awards’ value is anticipated to flow back into the UAE’s economy during the duration of the agreements.
Moreover, the deals are expected to support ADNOC’s requirement to drill thousands of new wells to expand its production capacity to five million barrels per day (mmbpd) by 2030, enable gas self-sufficiency for the UAE and “remain a leading low-cost, low-carbon oil producer.” In addition, these awards will enable hundreds of millions of dollars in cost savings, according to the company.
These framework agreements are in line with ADNOC’s strategy of optimising its procurement approach to reflect market dynamics, focusing on long-term contracts with an optimal number of suppliers that provide “stable and reliable delivery at highly competitive rates.”
The UAE player underscored that it has awarded drilling agreements worth over $11 billion (AED40.37 billion) since November 2021 to “top-tier contractors” for wellheads and related components, downhole completion equipment and related services, liner hangers, cementing services, wireline logging and directional drilling.
When it comes to these drilling deals, it is worth noting that two contracts to drive production capacity growth and expand offshore drilling activities were awarded to ADNOC Drilling earlier this month by ADNOC Offshore for eight jack-up rigs. These deals are worth more than $3.4 billion.
This was followed by another contract a few days later, which was given to ADNOC L&S. The deal totalling $1.7 billion is for 13 self-propelled jack-up barges.