In support of ADNOC Offshore’s growing drilling operations, ADNOC Drilling Company has announced the award of five agreements, each with a term of 10 years, which the company says have a total value of approximately $2 billion.
The contractual terms, particularly the duration, were agreed with the client in view of the strength of the offshore jack-up market with higher daily rates, ADNOC Drilling noted. The contracts, which support drilling operations in five fields in ADNOC’s offshore portfolio, are for the hire of five high-specification jack-up rigs, along with all necessary labor and equipment, according to the ADNOC Drilling press release.
The rigs will gradually commence activity from late 2023, with significant revenue expected in 2024 and the first full-year revenue contribution from 2025, ADNOC Drilling revealed. The revenues associated with these contracts are included in the company’s guidance for the year 2023 and in the medium term.
“We are happy to have been awarded these important contracts. Long-term contracts like these are the backbone of our business model, and offer a clear view of future earnings. As we continue to grow our fleet, our shareholders will benefit from the opportunity to invest directly in the accelerated growth of ADNOC’s production capacity, which is driving faster revenue growth and progressive and long-term returns shareholders’ term while responding to the world’s growing energy demand,” Abdulrahman Abdulla Al Seiari, Chief Executive Officer of ADNOC Drilling, said.
The five rigs have been acquired as part of the company’s rapid expansion program for the rig fleet, designed to enable the delivery of accelerated growth in ADNOC’s production capacity to responsibly meet increasing global energy demand, ADNOC Drilling noted. The new facilities – Salamah[2]Al Saadiyat, Al Sila, Rahman and Yas – will be among the most capable high-spec platforms working in the Arabian Gulf, the statement said.
Each of the five platforms will be equipped with a battery energy storage system to increase efficiency and reduce emissions, the company said. The hybrid power technology system stores energy in its batteries for use when there is a need for continuous power or to provide instant extra power when there is a surge in demand.
The new rigs are central to ADNOC Drilling’s rigorous decarbonisation strategy and the company’s commitment to support ADNOC’s goal of reducing greenhouse gas intensity by 25 percent per year 2030, as well as the UAE’s Net Zero 2050 strategic initiative, the company said.
This $2 billion contract award follows more than $11.5 billion in long-term contracts announced since early 2022.
The latest of the deals was signed in April, with ADNOC Drilling securing a five-year integrated drilling services (IDS) contract for a total of $412 million from ADNOC Offshore, from from the second quarter of 2023. ADNOC Drilling was tagged to provide IDS for the development of the Upper Zakum field, the largest producing field in ADNOC’s offshore portfolio.
Earlier this month, the company acquired two high-specification Gusto MSC CJ46 design offshore drilling units for $220 million. The rigs will be delivered to Abu Dhabi waters and become operational in the fourth quarter of 2023.
To contact the author, please email andreson.n.paul@gmail.com
