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MEOG COMMENTARY MEOG
ADNOC Drilling wins more work, posts results
The Emirati firm is riding high as ADNOC continues to pass down billion-dollar contracts for drilling work.
UAE
WHAT:
ADNOC Drilling has been awarded another $3.4bn worth of work to support the expansion of Abu Dhabi’s offshore oil production capacity.
WHY:
ADNOC is aiming to raise capacity to 5mn bpd by 2030 while also increasing its gas slate.
WHAT NEXT:
More contracts are likely to go to its drilling arm as its fleet expands, allowing it to reap the benefits of vertical integration.
THE drilling arm of the Abu Dhabi National Oil Co. (ADNOC) has received more contract awards and reported improved results as the listed unit reaps the benefits of its parent’s expan- sion efforts.
With ADNOC looking to increase produc- tion capacity across both oil and gas, the drip- down of contracts to subsidiaries ADNOC Drilling and ADNOC Logistics & Services (L&S) has sped up over the past year, particularly since the former held a highly-oversubscribed initial public offering (IPO) in November 2021.
The parent firm has set a target of raising oil capacity from around 4.2mn barrels per day (bpd) at present to 5mn bpd and aims to achieve gas self-sufficiency - both by 2030.
Latest award
After having won two contracts a week earlier worth more than $2bn in total, ADNOC Drilling said that eight of its jack-up rigs had been hired under contracts worth more than $3.4bn.
The 15-year deals with ADNOC Offshore are worth $1.5bn and $1.9bn, respectively, and will “support the expansion of ADNOC’s crude oil production”, but neither party disclosed which fields the rigs would work on.
The $5.4bn or so forms less than a third of the
nearly $18bn ADNOC has committed in the last year towards increasing drilling activity as part of its capacity push.
This has included long-term agreements for maintenance and expansion of capabilities at the UAE’s on- and off-shore oilfields with subsidi- aries and local agents of Halliburton, Schlum- berger, TechnipFMC Weatherford as well as with ADNOC Drilling and BakerHughes, which holds a 5% share in the Emirati driller.
ADNOC Offshore is seeking to increase its contribution to the national total to 2mn bpd and is focusing on expanding output at Upper Zakum – the world’s fourth largest oilfield – from 750,000 bpd to 1mn bpd by 2024, and Lower Zakum to 450,000 bpd by 2025 and 500,000 bpd by 2028. Meanwhile, the local National Petro- leum Construction Co. (NPCC) won a $946mn engineering, procurement and construction (EPC) deal to maintain production at the off- shore Umm Shaif oilfield at 275,000 bpd.
Increased oil output will be complemented by the development of the giant offshore Gha- sha concession which contains the Dalma, Gha- sha, Hail, Mubarraz, Nasr and Satah al-Razboot (SARB) fields and is the world’s largest offshore sour gas development.
ADNOC Drilling’s earlier $2bn deals cover
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w w w . N E W S B A S E . c o m Week 32 10•August•2022