The Abu Dhabi National Oil Company (ADNOC) announced framework agreement awards worth $1.94 billion (AED 7.1 billion) on Thursday to enable drilling growth. The awards build on ADNOC’s recent record investments in drilling-related equipment and services, and they support the company’s strategy to increase crude oil production capacity to 5 million barrels per day (mmbpd) by 2030 and drive the UAE’s gas self-sufficiency.
Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology as well as ADNOC’s Managing Director and Group CEO, stated, “The framework agreements announced today are a continuation of ADNOC’s unprecedented investment in services to enable the expansion of drilling activity needed to responsibly unlock the UAE’s leading low-cost and low-carbon intensity oil and gas resources. These awards not only support our 2030 strategy, but they are also expected to deliver over 80% of in-country value to the UAE and align with the UAE’s ‘Principles of the 50’ economic blueprint for long-term sustainability “expansion.”
The framework agreement awards cover ADNOC’s onshore and offshore fields and will run for five years with a two-year extension option. Furthermore, successful companies will create skilled employment opportunities for UAE nationals while also working to identify local manufacturing opportunities.
ADNOC Drilling received the most awards, with services including cased hole and open hole drilling, as well as perforation. This reflects the company’s expanded service profile as a result of its transformation into a fully Integrated Drilling Services (IDS) company following Baker Hughes’ acquisition of a 5% stake in the company in 2018.
ADNOC Upstream Executive Director Yaser Saeed Almazrouei stated, “The award to ADNOC Drilling demonstrates the company’s strong offering and capabilities, as well as its critical role in ADNOC’s future drilling activities. In accordance with the Leadership’s wise directives, the awards to all four companies will provide significant in-country value and create new job opportunities for UAE nationals.”
The framework agreement awards will help ADNOC meet its requirement to drill thousands of new wells in order to increase production capacity and maintain its position as a leading low-cost, low-carbon oil producer. The awards will also result in cost savings totaling hundreds of millions of dollars.
ADNOC is optimizing its procurement strategy to reflect market dynamics as part of its 2030 strategy, focusing on long-term contracts with an optimized number of suppliers who provide stable and reliable delivery at highly competitive rates. ADNOC announced nearly $6 billion (AED22 billion) in procurement awards to top-tier contractors for Wellheads and related components, Downhole Completion Equipment (DCE) and related services, and Liner Hangers and Cementing Accessories in November 2021.