Adnoc Drilling forms joint venture in boost to UAE's unconventional oil and gas sector

The Adnoc subsidiary will hold a majority 55% stake through its ADH RSC subsidiary

Adnoc Drilling signed agreements through its subsidiary ADH RSC for the creation of the joint venture – Turnwell Industries LLC OPC . Photo: Adnoc

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has joined forces with world’s largest oilfield services company Schlumberger (SLB) and drilling services company Patterson-UTI to create a joint venture, as it seeks to boost the UAE’s unconventional energy development and ensure a sustainable future.

Adnoc Drilling signed agreements through its subsidiary ADH RSC for the creation of the joint venture – Turnwell Industries – with the other two companies.

“Post completion of the joint venture, Adnoc Drilling through its wholly owned subsidiary will hold a 55 per cent majority equity stake, SLB a 30 per cent equity stake and Patterson-UTI the remaining 15 per cent equity stake,” it said in a statement on Monday.

The joint venture will focus on the advancement of the UAE's unconventional oil and gas programme.

“Agreement will accelerate the initial scope of 144 unconventional wells for delivery by Q4 2025 with potential for significant number of additional wells in the second phase,” SLB said in a separate statement.

“Turnwell will not only unlock the immense potential of the UAE's world-class unconventional energy resources but will also set new benchmarks for the global energy industry,” Adnoc Drilling chief executive Abdulrahman Al Seiari said.

In May, Adnoc Drilling said it had been awarded a $1.7 billion contract by parent company Adnoc to provide drilling services for the recovery of unconventional oil and gas resources. It had also signed a term sheet for potential partnerships with SLB and Patterson-UTI at the time.

The Adnoc subsidiary had also set up a company called Turnwell Industries, which will fulfil the contract and explore potential future opportunities in unconventional resources.

Turnwell will deliver 144 unconventional wells, with a distribution of 50 per cent gas and 50 per cent oil, Mr Al Seiari told The National at the time.

Turnwell, the new subsidiary, will operate as an independent company with its own management team and the company's headquarters or offices would be likely to be located closer to oil and gas operations, Mr Al Seiari said earlier.

Following Turnwell’s efficient and successful start-up and operational delivery, Adnoc has accelerated the campaign’s completion timeline, the statement on Monday said.

“The economic impact of the acceleration will benefit Adnoc Drilling’s 2025 earnings as well as its long-term growth through the potential acceleration of phase two with thousands of wells.”

Adnoc, responsible for most of the UAE's crude production, is working to develop its unconventional reserves as it looks to reach an output capacity of five million barrels per day by 2027. It can already produce up to 4.85 million bpd.

“UAE’s unconventional energy assets hold a promising future, and we are very much looking forward to elevating their performance in a safe and sustainable way,” Tarek Rizk, SLB’s president for the Middle East and North Africa region, said.

Abu Dhabi’s unconventional recoverable oil resources are estimated at 22 billion barrels of very light and sweet crude, comparable with Adnoc’s flagship lower-carbon Murban grade.

Unconventional resources, also key to the UAE's goal of becoming gas self-sufficient by 2030, require advanced extraction methods, such as those used in the US shale industry.

Adnoc Drilling earlier said it would use advanced technology, specifically artificial intelligence, in various aspects of its operations, including smart drilling design, completions engineering and production solutions.

Last year, Adnoc Drilling and Alpha Dhabi Holding, a unit of Abu Dhabi's International Holding Company, set up a joint venture to invest up to $1.5 billion to acquire technology-enabled companies in the oilfield services and energy sectors.