UAE's largest oil company, the Abu Dhabi National Oil Company (ADNOC), is investing $763.7 million (AED2.8 billion) in integrated rigless services across six of its artificial islands to support its production capacity expansion to 5 million barrels per day (mmbpd) by 2030.
The investment is in the form of three contracts awarded by ADNOC Offshore to Schlumberger, ADNOC Drilling, and Halliburton.
Schlumberger’s share of the award is valued at $381.18 million (AED1.4 billion); ADNOC Drilling’s share is valued at $228.71 million (AED839.58 million), and Halliburton’s share is valued at $153.87 million (AED564.85 million), ADNOC said in a statement on Wednesday.>
The six artificial islands covered by the awards are Asseifiya, Ettouk, Al Ghallan, and Umm Al Anbar in the Upper Zakum field and Al Qatia and Bu Sikeen in the SARB field.
The awards are expected to drive efficiencies of drilling and related services, and optimize costs in ADNOC's offshore operations as it ramps up drilling activities to increase production capacity and enable gas self-sufficiency for the UAE.
Over 80 percent of the total award value will flow back into the UAE's economy under ADNOC’s In-Country Value (ICV) program over the five-year duration of the contracts, the statement said.
Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, said: "The contractors bring best-in-class expertise and technologies with a proven track record in the industry and ADNOC Drilling’s scope reflects its expanded service profile following its successful transformation into a fully integrated drilling services (IDS) company, enabling it to offer its clients start-to-finish well drilling and construction services."
"The high In-Country Value generated from the awards will stimulate new business opportunities for the private sector and support the UAE’s post-Covid economic growth,” he added.>
ADNOC supplies nearly 3 percent of global oil demand.
According to the statement, the artificial islands provide significant cost and environmental benefits, particularly in shallow water, by enabling the use of lowercost land-drilling rigs instead of higher-cost offshore jack-up drilling rigs.
ADNOC is in talks with banks for the IPO of its drilling unit. ADNOC Drilling owns and operates a large fleet of rigs, including 75 onshore rigs, 20 offshore jackup rigs, and 11 well water rigs, according to its website. Reuters reported that ADNOC has added Goldman Sachs to a lead role on the IPO. Goldman Sachs was onboarded as global coordinator on Saudi Aramco's record $29.4 billion IPO in 2019.
(Reporting by Seban Scaria; editing by Anoop Menon)
This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021