ADNOC Drilling secures $733m contract for three island rigs

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UAE’s ADNOC Drilling has secured a $733m contract from ADNOC Offshore for the development of three island drilling rigs to advance operations at the offshore Zakum field.

The oil drilling firm said in a bourse filing that the three new island rigs will operate on innovative artificial islands, existing and newly constructed, at the offshore Zakum field to drill and complete wells.

The rigs, which Honghua Group will construct, will be delivered and commence operations in 2026. The partnership between ADNOC Drilling and Honghua Group will leverage the transformative nature of artificial intelligence (AI), digitisation, and innovative technologies in the design and operation of the rigs.

“These new island rigs will be the most advanced in the world, AI the most transformative technology of our generation. Our partnership with Honghua Group will amplify the creativity and ingenuity of our industry as we design and build these rigs of the future that drive efficiency and safety while delivering value for ADNOC Offshore,” said Abdulrahman Abdulla Al Seiari, the company’s CEO.

The design of the rig operating systems will leverage real-time condition, performance, and utilisation data to generate actionable insights, thereby enhancing rig performance and increasing efficiency.

ADNOC Drilling’s innovative artificial islands provide optimal conditions for extended-reach drilling (ERD). The top five most extended wells in the world are being drilled from these islands off the coast of Abu Dhabi.

The company said the total capital expenditure expected for the purchase of the new island rigs is around $210 million, primarily concentrated in 2025, with the first full-year revenue from the new rigs expected to be 2027.

The Abu Dhabi-based firm maintained its 2024 guidance of $200-250m for the island rig segment, which currently operates ten island rigs. Since its initial public offering in the last quarter of 2021, the company has invested more than $2.2 bn in building its drilling rig fleet.

The ADNOC Drilling fleet is expected to reach 148 by 2026, including these three island rigs and the three land rigs that were recently unveiled for the initial phase of the unconventional development.

Meanwhile, the firm secured a $1.7bn (Dhs6.24bn) contract to provide drilling and associated services to recover unconventional energy resources in May.

The company’s quarterly revenue rose by 24 per cent year-on-year (YoY) to $886m in Q1 2024, supported by the offshore jack-up and oilfield services segments that contributed 51 per cent and 16 per cent, respectively, to overall revenue growth.

Its profit for the three months ended March 31 reached $275m, up 26 per cent year over year, while its earnings before interests, taxes, depreciation, and amortisation rose 31 per cent to $437m.

Read: ADNOC Drilling secures Dhs6.24bn to unlock unconventional energy resources