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ADNOC announces record US$6bn investments to accelerate drilling growth

Industry

The Abu Dhabi National Oil Company (ADNOC) has announced investments worth up to almost US$6bn to enable drilling growth as it boosts its crude oil production capacity to five mmbbl per day by 2030 and drives gas self-sufficiency for the UAE

The announcement was made at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) and follows the recent successful listing of ADNOC Drilling on the Abu Dhabi Securities Exchange (ADX).

The investments are in the form of procurement awards to top-tier contractors for Wellheads and related components, downhole completion equipment (DCE) and related services, and liner hangers and cementing accessories – all crucial in drilling for oil and gas and completing wells.

Furthermore, more than US$900mn worth of wellheads and more than US$700mn worth of downhole completion equipment will be manufactured in the UAE as well as all liner hangers.

In addition, US$185mn in foreign direct investment (FDI) will flow into the UAE’s economy to establish two wellheads manufacturing and assembly facilities, enhance drilling-related equipment manufacturing and assembly, and enable local manufacturing of 20 new drilling completion products thereby strengthening the UAE’s drilling supply chain with vendor managed inventory.

HE Dr Sultan Ahmed Al Jaber, UAE minister of industry and advanced technology, and ADNOC managing director and group CEO, said, “ADNOC’s world record investments in drilling-related equipment underlines our commitment to responsibly unlocking our world-scale hydrocarbon resources and expanding our production capacity to continue providing the world with some of the least carbon-intensive barrels for decades to come.

“The awards were secured at highly competitive rates, enabling substantial cost savings for ADNOC and underpinning our broader efforts to drive commerciality and value across our entire portfolio.

The procurement award for wellheads and related components is worth up to US$3.27bn, making it the world’s largest in this category. Gulf Automation Services & Oilfield Supplies (GASOS), UAE agents for TechnipFMC, and Al Ghaith Oilfield Supplies & Services Company, UAE agents for Baker Hughes, secured the awards with both companies having an equal split of the scope which runs for 10 years.

The procurement award for Downhole Completion Equipment and related services is worth up to US$2.34bn, also making it the world’s largest in this category. Schlumberger Middle East S.A (Schlumberger) and Weatherford Bin Hamoodah Company L.L.C (Weatherford) secured the awards. Schlumberger’s scope is valued at up to US$1.41bn while Weatherford’s scope is valued at up to US$931mn. 

The procurement award for Liner Hangers and Cementing Accessories is worth up to US$337mn and runs for five years with an option to extend for two years.

The awards are expected to enable hundreds of millions of dollars in cost savings. As an integral part of its 2030 strategy, ADNOC is optimising its procurement strategy to reflect market dynamics, focusing on long-term contracts with a reduced number of suppliers that provide stable and reliable delivery at highly competitive rates.

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