Adnoc's logistics arm secures $1.17bn contract to boost offshore capacity

The five-year deal will help the company expand its oil production to 5 million barrels per day by 2030

Adnoc headquarters in Abu Dhabi. A five-year contract awarded by Adnoc Offshore to Adnoc Logistics & Services is for hiring 13 self-propelled jack-up barges. AFP

Abu Dhabi National Oil Company has signed a $1.17 billion contract with its logistics and services unit to boost offshore production capacity.

The five-year contract was awarded by Adnoc Offshore to Adnoc Logistics & Services (L&S) for hiring 13 self-propelled jack-up barges, the state-owned oil company said in a statement on Thursday.

The barges, which will be deployed across Adnoc's offshore fields, are "equipped to support a wide scope of operations, including project work, maintenance and accommodation".

The move will drive Adnoc's offshore operational efficiencies and support the expansion of its oil production capacity to 5 million barrels per day by 2030.

The availability of the self-propelled jack-up barges "will help us drive efficiencies and flexibility while cementing Adnoc's position as a leading low cost and low-carbon energy producer", said Ahmad Al Suwaidi, chief executive of Adnoc Offshore.

Adnoc L&S has the largest and most diversified fleet in the Middle East, with more than 200 vessels transporting crude oil, refined products, dry bulk, containerised cargo, liquefied petroleum gas and liquefied natural gas to global markets.

In June, the company said it had bought three new LNG vessels to expand its fleet to meet higher demand globally.

As part of the latest agreement, the self-propelled jack-up barges will be hired along with manpower and equipment, Adnoc said.

The barges will be utilised for rig-less well intervention and pre and post-drilling operations, as well as for topside maintenance and integrity restoration activities at its offshore assets, it added.

Instead of these services being provided through several discrete, operationally specific contracts, "all requirements have been unified in line with Adnoc's smart approach of centralising procurement and operational logistics management", the statement said.

The move provides Adnoc Offshore and its strategic partners with "operational flexibility" while enabling cost efficiencies and single point responsibility by Adnoc L&S.

"These vessels represent an important opportunity for growth and diversification for Adnoc L&S and will be a critical enabler of Adnoc Offshore’s growth,” said Capt Abdulkareem Al Masabi, chief executive of Adnoc Logistics & Services.

More than 80 per cent of the contract value will flow back into the UAE’s economy under Adnoc's In-Country Value (ICV) programme, supporting local economic growth and diversification.

"Critically, the award enables very high ICV, which can stimulate new business opportunities to support the growth and diversification of UAE’s economy,” Mr Al Suwaidi said.

In July, Adnoc announced a second discovery of natural gas in 2022 in the first exploration well in Abu Dhabi’s Offshore Block 2 exploration concession operated by Eni.

The discovery from a new, deeper reservoir indicates the presence of one trillion to 1.5 trillion standard cubic feet of raw gas, almost doubling the discovered field volume, Adnoc said at the time.

“We are committed to continuing to seize growth opportunities and deliver more value to Adnoc, and this announcement is another milestone in that journey," Capt Al Masabi said, referring to the latest contract.