ADNOC Drilling acquires two new jack-up rigs for $220m

ADNOC Drilling, the Middle East region’s largest national drilling company by rig fleet size, has acquired two offshore jack-up rigs for $220m to support ADNOC Group’s accelerated production capacity growth.

The acquisition is part of ADNOC Drilling’s fleet expansion and growth strategy, which is a key enabler of ADNOC’s accelerated production capacity growth to meet rising global energy demand.

The drilling firm said the rigs will be delivered into Abu Dhabi waters and become operational during the fourth quarter of 2023 with meaningful revenue contribution expected from 2024.

The two additional drilling units will almost double the company’s offshore jack-up rig fleet since early 2021, with further significant expansion expected from now till the end of 2024.

“The acquisition of these premium jack-up rigs will support one of our major customers, ADNOC Offshore, with its drilling and completion services requirements, as it delivers accelerated production capacity. It is the next step in the execution of our strategy to grow our business rapidly, significantly boost revenue and increase shareholder returns,” said Abdulrahman Abdulla Al Seiari, CEO of ADNOC Drilling.

“These rigs further cement our position as one of the world’s largest offshore jack-up rig fleet owners and support our plan to grow our overall fleet to 142 owned rigs by 2024.”

ADNOC Drilling’s growing fleet

Meanwhile, ADNOC Drilling has rapidly expanded its fleet size since listing on the Abu Dhabi Securities Exchange in 2021 from 95 to 115 owned rigs, as of March 31, 2023.

Last month, the drilling firm signed a $75m deal to acquire six newbuild hybrid power land rigs. The rigs, which Honghua Golden Coast is building, will progressively enter the fleet from the second quarter of 2024, with partial revenue and earnings before interests, taxes, depreciation and amortisation (EBITDA) contributions from 2024 and full-year contribution from all rigs in 2025.

ADNOC Drilling said the rigs use a high-capacity battery and engine automation in parallel with the rigs’ traditional diesel generators.

The hybrid power technology system stores energy in its batteries to use when there is a need for continuous power or to provide instant extra power when there is an increase in demand, reducing a rig’s greenhouse gas emissions by up to 15 per cent compared to a traditional rig.

Earlier in March, the Abu Dhabi-based firm said it would acquire ten new-build hybrid power land drilling rigs for $252m as the company looks to bolster its fleet to 142 rigs by the end of 2024.

ADNOC Drilling secured a five-year $412m oilfield development contract to boost crude oil production capabilities at the Upper Zakum oil field from ADNOC Offshore in April.

The company’s revenues jumped 19 per cent to $716m in the first quarter of 2023, led by its onshore and oilfield services segments as the company accelerates UAE’s production capacity target of five million barrels per day (bpd) by 2027.

The drilling firm maintained its strong guidance for 2023, with revenue projected at between $3bn and $3.2bn, representing year-on-year growth of up to 20 per cent. It is expecting a record net profit in 2023 of $850m to $1bn in the same period. ADNOC Drilling projected capital to be in the $1.3 – $1.75bn range in 2023.

Read: ADNOC Drilling secures $412m contract to develop Upper Zakum oilfield