Adnoc Drilling secures $2bn offshore jack-up contracts

The award follows more than $11.5bn in long-term contracts announced since the beginning of last year

Adnoc Drilling has provided integrated services to sister companies Adnoc Onshore and Adnoc Offshore since 2019. Photo: Wam

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, said on Friday it has been awarded 10-year contracts to provide five offshore jack-up rigs for nearly $2 billion, to support Adnoc's production capacity growth.

This award follows more than $11.5 billion in long-term contracts announced since the beginning of last year.

“The contracts, supporting drilling operations across five fields in Adnoc's offshore portfolio, are for the charter of five high-specification, premium jack-up rigs, along with all required manpower and equipment,” Adnoc Drilling said in a statement.

The new rigs – Salamah, Al Saadiyat, Al Sila, Ramhan and Yas – will be among the most capable, high-specification ones in the Arabian Gulf.

They have been acquired as part of the company’s fast-tracked rig fleet expansion programme.

This is designed to enable the delivery of Adnoc’s accelerated production capacity growth to responsibly meet rising global energy demand.

“Long-term contracts like these are the backbone of our business model, providing clear line of sight on future earnings,” said Abdulrahman Abdulla Al Seiari, chief executive of Adnoc Drilling.

“As we continue to grow our fleet, our shareholders will benefit from the opportunity to be directly invested in Adnoc’s accelerated production capacity growth, which is driving faster revenue growth and progressive, long-term shareholder returns, while responding to the world’s rising energy demand,” Mr Al Seiari said.

The rigs will commence activity progressively from the end of this year, with significant revenue expected next year and first full-year revenue contribution from 2025, Adnoc Drilling said.

The revenue associated with these contracts is included in the company’s full year 2023 and medium-term guidance.

Each of the five rigs will be equipped with a battery energy storage system to increase efficiency and reduce emissions.

This hybrid power technology system stores energy in its batteries to use when there is a need for continuous power or to provide instant extra power when there is an increase in demand.

The new rigs are central to Adnoc Drilling’s decarbonisation strategy and the company’s commitment to support Adnoc’s target to reduce greenhouse gas intensity by 25 per cent by 2030.

This will also contribute to the UAE Net Zero by 2050 initiative.

Adnoc Drilling has provided integrated drilling services to sister companies Adnoc Onshore and Adnoc Offshore since 2019.

It has been expanding operations as parent company Adnoc looks to boost its production capacity to five million barrels per day by 2027.

Adnoc Drilling this month signed an agreement to acquire two offshore jack-up rigs for $220 million.

Last month, it signed an agreement to acquire six newbuild hybrid power land rigs for $75 million, as it expands and helps parent company Adnoc to increase its crude oil production capacity.