ADNOC is pumping in 'record' Dh22b on new drilling projects and raise oil production
More than Dh6b worth of drilling equipment to be made in UAE itself
Dubai: Abu Dhabi oil giant ADNOC is pumping in "record investments" of nearly Dh22 billion to raise drilling growth as it boosts crude oil production capacity to 5 million barrels per day (mmbpd) by 2030. In tandem, the company is also working at driving gas self-sufficiency for the UAE.
The investments are in the form of procurement awards to top-tier contractors for Wellheads and related components, Downhole Completion Equipment (DCE) and related services, and Liner Hangers and Cementing Accessories – all crucial in drilling for oil and gas and completing wells.
- The procurement award for wellheads and related components is worth up to Dh12 billion, making it the world’s biggest such in this category. Gulf Automation Services & Oilfield Supplies (UAE agents for TechnipFMC) and Al Ghaith Oilfield Supplies & Services Company (UAE agents for Baker Hughes) secured the awards with both companies having an equal split of the scope which runs for 10 years.
- The procurement award for Downhole Completion Equipment and related services is worth up to Dh8.6 billion. This is also the world’s largest in this category. Schlumberger Middle East and Weatherford Bin Hamoodah Company secured the awards. Schlumberger’s scope is valued at up to Dh5.18 billion, while Weatherford’s is up to Dh3.42 billion. The award runs for five years with an option to extend for two years.
- The award for liner hangers and cementing accessories is worth up to Dh1.24 billion and runs for five years with an option to extend for two years.
Most crucially, over Dh6.6 billion worth of drilling-related equipment are to be made in the UAE itself. “ADNOC’s world record investments in drilling-related equipment underlines our commitment to responsibly unlocking our world-scale hydrocarbon resources and expanding our production capacity to continue providing the world with some of the least carbon-intensive barrels for decades to come," said Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO.
"The awards were secured at highly competitive rates, enabling substantial cost savings for ADNOC and underpinning our broader efforts to drive commerciality and value across our entire portfolio."
More than Dh3.3 billion worth of wellheads and over Dh2.6 billion worth of Downhole Completion Equipment will be manufactured in the UAE as well as all liner hangers. In addition, Dh679 million in foreign direct investment (FDI) will flow into the UAE’s economy to establish two wellheads manufacturing and assembly facilities, enhance drilling-related equipment manufacturing and assembly, and enable local manufacturing of 20 new drilling completion products.
This will strengthen the UAE’s drilling supply chain with vendor managed inventory.