Stock-ADNOC-Drilling-Rig-at-Upper-Zakum
File picture of drilling activity at the Zakum field. The three new drilling rigs will be deployed on the offshore artificial islands. Image Credit: Supplied

Dubai: In a contract valued at $733 million, ADNOC Drilling will deploy three ‘island’ drilling rigs for the offshore Zakum field operations in Abu Dhabi. It was awarded by a group entity, ADNOC Offshore.

The new island rigs will operate on existing and newly constructed artificial islands for drilling and completion of wells.

The contract will ‘follow existing agreements’ with ADNOC Drilling’s revenue underpinned by the long-term duration coupled with guaranteed returns. The capital expenditure for the new rigs will be around $210 million, mostly happening in 2025. The first full-year revenue for ADNOC Drilling from the new rigs is expected to be 2027.

The deal 'marks a significant milestone in our company’s accelerated growth journey', said Abdulrahman Abdulla Al Seiari, CEO of ADNOC Drilling. "These new island rigs will be the most advanced in the world, embracing AI, (which is) the most tranformative techology of our generation."

The rigs are to be constructed by Honghua Group. Their delivery and commencement of operations at Zakum is expected sometime during 2026. (The rigs will be designed and built as part of a partnership between ADNOC Drilling and Honghua Group.)

Since the fourth quarter 2021, when its IPO happened, ADNOC Drilling invested more than $2.2 billion in building 'one of the largest integrated drilling fleets in the world'.

Drilling at the Zakum
Drilling operations on ADNOC’s artificial islands 'create the ideal conditions' for extended reach drilling (ERD), with the Top 5 longest wells in the world being delivered from the Zakum islands off the coast of Abu Dhabi, the most recently delivered was over 52,000 feet.

"This partnership has been specifically formed to harness the transformative nature of AI, digitization, and advanced technology in the design and operation of these next-generation drilling rigs," said a statement. ADNOC Drilling and HH will look to also collaborate with AIQ, the Abu Dhabi based entity dealing with energy sector needs.

The full-year 2024 guidance of $200 million to $250 million for the 'island rig' segment, which currently operates 10 island rigs, is unchanged.

ADNOC Drilling's fleet is now expected to total at least 148 by 2026 including these three new rigs as well as the previously announced three land rigs for the initial phase of the unconventionals development.