ADNOC invests over $750 mln in drilling-related services
The Abu Dhabi National Oil Company (ADNOC) announced today, an investment of $763.7 million (AED2.8 billion) in integrated rigless services across six of its artificial islands in the Upper Zakum and Satah Al Razboot (SARB) fields to support its production capacity expansion to 5 million barrels per day (mmbpd) by 2030, according to the company's release.
The investment is in the form of three contracts awarded by ADNOC Offshore to Schlumberger, ADNOC Drilling, and Halliburton after a competitive tender process. 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).
Over 80% of the total award value will flow back into the United Arab Emirate’s (UAE) economy under ADNOC’s In-Country Value (ICV) program over the 5-year duration of the contracts, reinforcing ADNOC’s commitment to ensuring more economic value remains in the country from the contracts it awards.
The scope of the contracts includes coiled tubing services with thru-tubing downhole tools, stimulation services, including equipment and chemicals/fluid systems, surface well testing services, wireline, and production logging services and tools, saturation monitoring, and well integrity.
Previously, ADNOC Offshore’s rigless services were provided through several discrete service-specific contracts. Unifying the scope through integrated service contracts, underpins ADNOC’s smart approach to procurement and provides ADNOC Offshore with operational flexibility while enabling cost efficiencies and single point responsibility by the contractors.
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. Artificial islands provide significant cost and environmental benefits, particularly in shallow water, by enabling the use of lower-cost land-drilling rigs instead of higher-cost offshore jack-up drilling rigs. ADNOC has a proven record of developing artificial islands and drilling the Middle-East’s longest wells, as part of its continued commitment to protecting the UAE’s marine environment while enabling greater operational efficiencies and safety.
ADNOC Drilling’s transformation into a fully integrated drilling services provider followed the award to Baker Hughes of a 5% share in the company, which is now capable of delivering start-to-finish drilling and well-construction services onshore and offshore with proven efficiency gains. As of May 2021, ADNOC Drilling has delivered over 180 IDS wells since 2018, achieving an efficiency improvement of close to 50%, which resulted in over $210 million (AED767 million) savings.
As an integral part of its 2030 strategy, ADNOC is optimizing its procurement strategy to reflect market dynamics, focusing on long-term contracts with a reduced number of suppliers that provide stable and reliable delivery at highly competitive rates. This smart approach is enabling ADNOC to create more value, drive efficiencies, and ensure that strategic materials and components are available on time while achieving substantial efficiency gains as it increases overall procurement spend.