Adnoc plans investments worth $6b to enable drilling growth

The Abu Dhabi National Oil Company (Adnoc) on Tuesday announced record investments worth up to almost $6 billion (Dhs22 billion) to enable drilling growth as it boosts its crude oil production capacity to 5 million barrels per day (mmbpd) by 2030 and drives gas self-sufficiency for the UAE.

The announcement was made at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) and follows the recent successful listing of Adnoc Drilling on the Abu Dhabi Securities Exchange (ADX).

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.

Almost 60 per cent of the total value of the awards could flow back into the UAE’s economy under Adnoc’s successful In-Country Value (ICV) programme over the duration of the awards.

Furthermore, more than $900 million (Dhs3.3 billion) worth of wellheads and over $700 million (Dhs2.6 billion) worth of Downhole Completion Equipment will be manufactured in the UAE as well as all liner hangers.

In addition, $185 million (Dhs679 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 thereby strengthening the UAE’s drilling supply chain with vendor managed inventory.

The huge ICV resulting from this mega award package directly supports the objectives of the UAE’s Principles of the 50 to develop human capital and accelerate the development of a dynamic economy.

Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Adnoc Managing Director and Group CEO, said, “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. 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. “Crucially, the awards will directly create more skilled employment opportunities for UAE Nationals, enhance domestic manufacturing and further stimulate the growth of the private sector and our local industrial base.

“This is yet another example of how Adnoc is working to support the growth and diversification of the UAE’s economy, in line with the Principles of the 50 and the Leadership’s wise directives.”

Meanwhile Abu Dhabi National Oil Company (Adnoc) and ADQ today announced that Japan’s Mitsui & Co., Ltd (Mitsui) and the Republic of Korea’s (Korea) GS Energy Corporation (GS Energy) have agreed to partner with TA’ZIZ and Fertiglobe to develop the world-scale low-carbon blue ammonia facility at the TA’ZIZ Industrial Chemicals Zone in Ruwais. The partnerships are expected to accelerate Abu Dhabi’s position as a leader in low-carbon fuels, capitalizing on the growing demand for blue ammonia as a carrier fuel for clean hydrogen.

The agreements highlight the exceptional international investor interest in TA’ZIZ and follow Adnoc and Fertiglobe’s recent sales of low-carbon blue ammonia demonstration cargos to customers in Japan and Korea.

Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Managing Director and Group CEO of Adnoc, said, “The strategic partnerships with Mitsui and GS Energy, two of East Asia’s global energy champions, reflect Adnoc’s commitment to increase the production of low-carbon hydrogen and ammonia. As the world embraces the energy transition, we will work closely with our new partners to jointly develop new hydrogen markets and applications for low-carbon ammonia to meet the needs of global export markets for the energy and industry markets in Japan and Korea.

“These important agreements strengthen our long-standing ties with the two countries in the fast-growing clean hydrogen economy, reinforcing Abu Dhabi’s pivotal role as a global hub for low-carbon fuels and unlocking significant economic growth opportunities for the UAE.”

The procurement award for wellheads and related components is worth up to $3.27 billion (Dhs12 billion), making it the world’s largest in this category. Gulf Automation Services & Oilfield Supplies (GASOS), 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.

WAM