Adnoc Drilling acquires more premium jack-up rig for $70m

Staff Reporter, Gulf Today

Adnoc Drilling Company on Wednesday announced it has signed a sale and purchase agreement  to acquire an additional premium offshore jack-up drilling unit (the “rig”) for $70 million.

The sale and purchase agreement is the third signed by the Company in recent months, with an agreement for two premium drilling units signed on May 30, and another for one premium drilling unit signed on June 10.

 All four premium offshore drilling units are expected to join the Company’s fleet by year-end, bringing Adnoc Drilling’s total offshore jack-up fleet to 28 operational units, one of the largest operating fleets in the world. The acquisition further cements Adnoc Drilling’s position as the largest owner and operator of rigs in the Middle East.

Adnoc Drilling’s amplified rig acquisition program is central to its strategic plan to substantially grow its business, significantly enhancing Company revenues and shareholder returns over the coming years.

Abdulrahman Abdullah Al Seiari, Chief Executive Officer of Adnoc Drilling, commented: “The acquisition of this additional premium drilling unit is central to our bold growth strategy and the rig will support us in delivering on our commitments to shareholders.

“Over the past 50 years, Adnoc Drilling has grown in size, stature and capability. Our position today, as owner and operator of one of the largest offshore jack-up fleets in the world is testament to the expertise of our people and the visionary leadership of the UAE.”

The cost of the acquisition is part of the Company’s three-year guidance on capital expenditure and strategic plans to expand its existing business.

Adnoc Classification: Public Following its initial public offering in October 2021, Adnoc Drilling has demonstrated strong and resilient growth. In the first half of 2022 the Company delivered revenue of $1.27 billion, a 13% increase year-on-year, with $379 million in net income – a 34% increase.

Adnoc Drilling, listed on the Abu Dhabi Securities Exchange, is the largest national drilling company in the Middle East by rig fleet size, as well as the sole provider of drilling rig hire services and certain associated rig-related services to Adnoc Group. The company is a critical link in Adnoc’s upstream business, as Adnoc continues to move towards its oil production capacity targets enables gas self-sufficiency for the UAE. Adnoc Drilling is also the first national Integrated Drilling Services (IDS) company in the region, offering start-to-finish wells and services that encompass the entire drilling value chain.

Meanwhile, the Abu Dhabi Department of Energy (DoE) today announced that the development of its hydrogen policy and regulatory framework aims to accelerate the UAE’s national hydrogen strategy and help the nation attain global leadership in low-carbon and clean hydrogen. For the design of this regulatory framework, the DoE is working with key Abu Dhabi government and private sector stakeholders including Adnoc, Mubadala, Masdar, ADQ, TAQA, Emirates Water and Electricity Company, Abu Dhabi Ports, Ministry of Infrastructure and Energy, Department of Economic Development, Department of Municipalities and Transport, Department of Finance and Environment Agency – Abu Dhabi.

Abu Dhabi Department of Energy’s hydrogen policy and regulatory framework aims to clearly define policies, regulations, standards, and certifications for the emerging hydrogen industry to be globally competitive. Due to the nature of the industry, its wide target markets, emerging industrial forms and functions, growth characteristics of demand, and deeply technical components, a policy and regulatory framework is essential to ensure sustainable developments and to position Abu Dhabi as a leader in the production and usage of hydrogen worldwide. The DoE expects to report on the outcomes of the Policy and the regulatory framework before the end of 2022.

Eng. Ahmed Mohammed Belajer Al Rumaithi, Undersecretary of the Abu Dhabi Department of Energy, said: “A vibrant low carbon hydrogen production and consumption industry will place Abu Dhabi and the UAE at the global forefront of countries producing green energy. It can potentially increase low-carbon hydrogen production in Abu Dhabi to more than a million tonnes per annum by 2030. Locally produced hydrogen will act as a driver of innovation and economic diversification, allowing for the decarbonisation of the economy in line with UAE National Energy Strategy 2050, Net Zero commitment and improved energy security & to support the economic, environmental, and social sustainability requirements of the emirate.”

“This is an opportunity for Abu Dhabi, with its abundant solar resources, to contribute to fulfilling a global need that will create new local industries and jobs, offer growth for existing firms, develop new skill sets, and facilitate more research. It will also stimulate more foreign direct investment in the energy sector.”