Adnoc Drilling secures $980m contract to support offshore push

More than 80% of the deal value will flow back into the UAE economy through Adnoc's In-Country Value programme

The latest contract brings the total value of awards from Adnoc Offshore to Adnoc Drilling to $5.95 billion in 2022. Photo: Adnoc

Adnoc Drilling secured a $980 million contract from Adnoc to hire two jack-up offshore rigs, associated manpower and equipment, which will help support the parent company's offshore operations and its goal of boosting crude oil production capacity to five million barrels per day by 2030 amid growing global demand for oil and gas with a lower carbon intensity.

More than 80 per cent of the award value will flow back into the UAE economy under Adnoc’s In-Country Value programme, the company said on Thursday.

The latest contract award brings the total value of awards from Adnoc Offshore to Adnoc Drilling to $5.95 billion in 2022.

“Contracts like this help ensure we continuously deliver strong and sustained growth, while further driving shareholder value, and our ambitious rig fleet expansion program, to which we have made a significant capex commitment, is making the delivery of such contracts possible," said Adnoc Drilling chief executive Abdulrahman Abdullah Al Seiari.

“Our status as a key enabler of Adnoc’s production capacity expansion targets, offers investors a solid opportunity for sustained and predictable revenue growth, coupled with market leading cash flows and profitability margins, enabling our progressive dividend policy.”

Adnoc Drilling, which has provided services to Adnoc Offshore since 2019, is the largest national drilling company in the Middle East by rig fleet size, owning 105 rigs as of July 31 and expecting two new rigs to commence operations by the end of 2022.

Yaser Almazrouei, Adnoc's upstream executive director said the most recent award for the hire of jack-up rigs supports the company's "ongoing efforts to responsibly unlock our lower carbon intensity oil and gas resources, alongside our strategic international partners, and contribute to global energy security”.

Earlier this week, Adnoc Drilling awarded a contract worth $1.53bn for the provision of jack-up and island rigs and associated integrated drilling services. This followed two awards in August worth $3.43bn for the hire of eight jack-up rigs.

Last month, Adnoc and Abu Dhabi National Energy Company, better known as Taqa, closed their $3.8bn strategic project to power and decarbonise Adnoc's offshore production operations.

Adnoc Drilling has provided integrated drilling services to Adnoc Offshore since 2019.

Adnoc is the company's majority shareholder, with an 84 per cent stake, while US energy services company Baker Hughes, which entered into a partnership with Adnoc Drilling in October 2018, has 5 per cent while US contract oil and gas driller Helmerich & Payne holds 1 per cent.