Adnoc Drilling Company and Alpha Dhabi Holding have agreed to establish a strategic investment joint venture (JV) to invest up to $1.5 billion to acquire technology-enabled companies in the oilfield services (OFS) and energy sectors.

Adnoc Drilling will own 51% of the JV with Alpha Dhabi holding 49%, bringing together a market-leading drilling and OFS expert and a prominent UAE conglomerate with a proven track-record of fueling business growth in diverse sectors. Lunate Capital Limited will provide asset management support to the JV.

Leveraging Adnoc Drilling’s scalable technology ecosystem, the JV will be jointly controlled by Adnoc Drilling and Alpha Dhabi, and is empowered to invest in value-accretive businesses globally across the OFS and energy value chain. This will further develop and scale up Adnoc Drilling’s integrated drilling and OFS offering and enhance operational efficiencies.

Abdulrahman Abdulla Al Seiari, Chief Executive Officer of Adnoc Drilling, said: “We are excited to enter into this strategic partnership with Alpha Dhabi, that will drive further growth for Adnoc Drilling and its shareholders, enable economic diversification, and support ongoing decarbonization efforts, benefitting all stakeholders. The JV will invest in innovative technology, enhancing our services, while adding depth to our offering and further expanding our business.”

The JV will identify an actionable pipeline of potential transactions that are value-accretive to both shareholders.

Eng. Hamad Al Ameri, Managing Director and Group CEO of Alpha Dhabi, commented, “This joint venture with Adnoc Drilling marks a significant milestone in our commitment to driving growth and fostering innovation in the energy domain. Pooling our collective expertise, we are poised to unlock new opportunities, delivering sustainable value to our stakeholders. Diversification and innovation are critical pillars in today’s dynamic global economy. This partnership not only underscores our dedication to these principles but also positions us to significantly boost the UAE’s domestic growth, laying the foundation for sustained national prosperity.”

Adnoc Drilling Company recently announced an interim dividend payment of $358 million, or 8.22 fils per share, for the first half of 2023. This represents another 5 percent year-on-year increase, in-line with the Company’s progressive dividend policy. The interim dividend distribution will be on or around October 27, 2023, to all shareholders of record as of October 19, 2023.

Abdulrahman Abdulla Al Seiari, Adnoc Drilling’s Chief Executive Officer, said, “This continued growth in dividend reflects Adnoc Drilling’s strong and visible cash flows and confidence in long-term growth. Our ability to deliver attractive, sustainable and growing shareholder returns is a testament to our focus on profitability and cash flow, with our customers’ growth plans and our own initiatives providing a solid pipeline of further growth.

“During the first half of 2023, we have continued the rapid and unprecedented expansion of our fleet, as well as signing contracts worth more than $2.4 billion. These long-term contracts, and our unique relationship with Adnoc, provide clear, long-term visibility on cashflows and earnings, as well as protection against market volatility.”

In the first half of 2023, Adnoc Drilling announced increased revenue of $1.4 billion, up 13 percent year-on-year, EBITDA of $677 million, up 17 percent year-on-year and net profit of $446 million, up 18 percent year-on-year.

The interim dividend 2023 delivers on the Company’s progressive dividend policy, reflecting the expectation of strong cash flow and long-term earnings visibility, while providing ample headroom to fund ongoing operations.

Adnoc Drilling, listed on the Abu Dhabi Securities Exchange, is the largest drilling and well completions company in the Middle East by fleet size, owning and operating one of the largest multi-discipline drilling fleets in the world. The Company is a critical link in Adnoc’s upstream business, as Adnoc responsibly accelerates its production capacity targets in light of globally increasing demand for energy and enables gas self-sufficiency for the UAE. Adnoc Drilling incorporated Integrated Drilling Services into its portfolio in 2018 and now offers a total solution of start-to-finish wells and associated services that encompass the entire drilling value chain.

Alpha Dhabi Holding, a UAE listed company, was established in 2013 and is one of the fastest growing Abu Dhabi based investment holding companies, with more than 150 businesses spread across healthcare, renewable energy, petrochemicals and other industries such as real estate, construction and hospitality. With over 90,000 employees, ADH is a strategic contributor to the UAE economy and is committed to drive continuous growth for its stakeholders through investments in emerging businesses, supporting innovation and diversity.