ADNOC Drilling secures $2bn offshore jack-up contracts

ADNOC Drilling has secured 10-year contracts worth $2bn to provide five offshore jack-up rigs to boost ADNOC Group’s crude oil production capabilities.

The drilling company said the awarding of the contracts follows more than $11.5bn in long-term contracts announced since the beginning of 2022. ADNOC Drilling said the five rigs are set to commence activity progressively from the end of 2023, with significant revenue expected in 2024 and the first full-year revenue contribution from 2025.

The revenue associated with these contracts will be included in the company’s full-year 2023 and medium-term guidance. The new rigs – Salamah, Al Saadiyat, Al Sila, Ramhan and Yas – will be among the most capable, high-specification ones in the Arabian Gulf.

“Long-term contracts like these are the backbone of our business model, providing a clear line of sight on future earnings,” Abdulrahman Abdulla Al Seiari, CEO of ADNOC Drilling.

“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.”

The five rigs have been acquired as part of the company’s fast-tracked rig fleet expansion programme, designed to enable the delivery of the Abi Dhabi energy giant’s accelerated production capacity growth to meet rising global energy demand.

ADNOC Drilling said each rig will be equipped with a battery energy storage system to increase efficiency and reduce emissions. 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.

The drilling firm said the new rigs are central to its decarbonisation strategy as part of its commitment to support ADNOC’s target to reduce greenhouse gas intensity by 25 per cent by 2030, as well as the UAE Net Zero by 2050 strategic initiative.

ADNOC Drilling expands 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.

In May, the company acquired signed a $75m deal to acquire six newbuild hybrid power land rigs and two additional offshore jack-up rigs for $220m to support ADNOC’s accelerated production capacity growth.

ADNOC Drilling, the Middle East region’s largest national drilling company by rig fleet size, also announced plans to acquire ten new-build hybrid power land drilling rigs for $252m in March as the company looks to bolster its fleet to 142 rigs by the end of 2024.

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.

It 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 acquires two new jack-up rigs for $220m