The Abu Dhabi National Oil Company (ADNOC) has announced the award of multi-billion-dollar contracts for the procurement of casing and tubing as it drives value through its smart approach to procurement
The company stated that the combined scope of the three contracts awarded is one of the world’s largest in this category, maximising value for ADNOC across its drilling value chain and underpinning its strategy to deliver a more profitable upstream business.
The contracts – which were awarded to Consolidated Suppliers Establishment, representing Tenaris S.A. (from Luxembourg); Abu Dhabi Oilfield Services Company, representing Vallourec S.A. (from France); and Habshan Trading Company, representing Marubeni Corporation (from Japan) – have a combined scope of US$3.6bn and the potential to achieve In-Country Value of more than 50 per cent.
This includes more than US$100mn in foreign direct investment, over the next five years, to establish a state-of-the-art oil country tubular goods (OCTG) threading plant and repair centre, and a training academy in Abu Dhabi to enhance local expertise and generate value for the UAE.
Under the terms of the contracts, the three companies will supply a combined total of one million metric tonnes of casing and tubing – which by comparison is equivalent to the distance from Abu Dhabi to Houston – more than five years, to support ADNOC’s drilling activities.
Abdulmunim Saif Al Kindy, ADNOC upstream executive director, said, “These agreements will provide ADNOC with increased flexibility to proactively respond to the demands of the evolving energy landscape as we ramp up our drilling activities and deliver our 2030 strategy.”
“They will also generate substantial In-Country Value and provide attractive foreign direct investment opportunities for the private sector, further demonstrating ADNOC’s commitment to creating sustainable value for the nation and its people, in line with the leadership’s wise directives,” he added.
The contract awards followed a robust tendering process that included a rigorous assessment of how much of the contract value would support the growth and diversification of the UAE’s economy through ADNOC’s In-Country Value Programme, which is aimed at nurturing new local and international partnerships and business opportunities, catalysing socio-economic growth and creating job opportunities for UAE nationals.
The awards complement ADNOC’s substantial upstream growth plans and drive to deliver integrated drilling services as it plans to increase its conventional drilling by 40 per cent by 2025 and substantially ramp up the number of its unconventional wells. This is part of its target to achieve four million barrels of oil production capacity per day (mmbpd) by the end of 2020 and five mmbpd by 2030.
