Adipec 2021: Adnoc to Invest $6bn in drilling as it boosts crude oil production capacity

Adnoc is investing $6 billion in drilling growth as it boosts its crude oil production capacity to 5 million barrels per day by 2030.

The investment is in the form of procurement awards to top-tier contractors for wellheads and related components, downhole completion equipment and related services, and liner hangers and cementing accessories, which are crucial in drilling for oil and gas and completing wells, Adnoc said on Tuesday.

“Adnoc’s world-record investment 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,” said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc managing director and group chief executive.

The contracts were awarded to different local and international companies. Gulf Automation Services & Oilfield Supplies, UAE agents for TechnipFMC, and Al Ghaith Oilfield Supplies & Services Company, UAE agents for Baker Hughes, secured $3.27bn worth of contracts related to the procurement of wellheads and related components for drilling operations.

Schlumberger Middle East and Weatherford Bin Hamoodah company won another contract for downhole completion equipment and related services. The value of the deal is $2.34bn and the award runs for five years, with an option to extend for two years.

“The scope of the awards cut across the Adnoc group and will provide Adnoc with a robust supply chain of drilling-related equipment to enable its requirement to drill thousands of new wells as it expands its production capacity while maintaining its leading low-cost oil producer status,” the company said.

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

Adnoc also said more than $900m worth of wellheads, and more than $700m worth of downhole completion equipment will be manufactured in the UAE, in addition to all liner hangers.

Furthermore, $185m in foreign direct investment will flow into the UAE’s economy to establish two wellheads manufacturing and assembly complexes, enhance drilling-related equipment manufacturing and assembly, as well as enable the local manufacturing of 20 new drilling completion products.

The procurement award for liner hangers and cementing accessories is worth up to $337m and runs for five years, with an option to extend for two years.

The award for liner hangers was made to Weatherford Bin Hamoodah and Uni-Arab Engineering & Oilfield Service, the UAE agents of Weatherford and Baker Hughes, respectively.

The award for cementing accessories was made to Al Ghaith Oilfield Supplies & Services, Best Pick General Trading and Al Mansoori Specialized Engineering, UAE agents for Downhole Products, NeOz Energy and Sledgehammer, respectively.

“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,” Dr Al Jaber, said.

“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.”