ADNOC Drilling lands $2bn contracts for offshore drilling operations

ADNOC Drilling Company PJSC has secured five contracts for a total value of approximately $2 billion to support the growing drilling operations of ADNOC Offshore.

These long-term contracts, reflecting the robust offshore jack-up market’s higher day rates, will be instrumental in drilling operations across five fields in ADNOC’s offshore portfolio.

The contracts, set to bolster revenue significantly from 2024, encompass the charter of five high-specification, premium jack-up rigs along with all required manpower and equipment. The new rigs, named SALAMAH1, AL SAADIYAT, AL SILA, RAMHAN, and YAS, are part of ADNOC’s accelerated rig fleet expansion program. This initiative aims to fulfill ADNOC’s commitment to increased production capacity, meeting the rising global energy demand responsibly.

Scheduled to commence activity progressively from late 2023, the rigs are expected to contribute fully to the company’s revenue from 2025. The associated revenue is included in the company’s full-year 2023 and medium-term guidance.

Significantly, each rig will be equipped with a battery energy storage system, reflecting ADNOC Drilling’s commitment to reducing emissions. This hybrid power technology system provides continuous power and can supply extra power instantly when demand increases.

These rigs form the backbone of ADNOC Drilling’s decarbonization strategy, aligning with ADNOC’s target of a 25% reduction in greenhouse gas intensity by 2030. They also contribute to the UAE’s Net Zero by 2050 strategic initiative.

Abdulrahman Abdulla Al Seiari — ADNOC Drilling CEO said: “We are pleased to have been awarded these important contracts. Long-term contracts like these are the backbone of our business model, providing clear line of sight on future earnings.

“As we continue to grow our fleet, our shareholders will benefit from the opportunity to be directly invested in ADNOC’s accelerated production capacity growth, which is driving faster revenue growth and progressive, long-term shareholder returns while responding to the world’s rising energy demand.”

This $2 billion contract award is part of the larger procurement initiative from ADNOC, with over $11.5 billion in long-term contracts announced since the beginning of 2022.