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

Image credit: ADNOC Drilling

UAE’s ADNOC Drilling has secured a $1.7bn (Dhs6.24bn) contract to provide drilling and associated services to recover unconventional energy resources.

The drilling firm has incorporated a new company, Turnwell Industries, to service the contract and explore future opportunities in unconventional resources.

The new company, which will primarily engage in unconventional drilling operations, will deliver 144 unconventional oil and gas wells as part of the contract. Unconventional energy refers to oil and gas resources trapped in subsurface reservoirs requiring additional technology and processes to unlock them.

ADNOC Drilling also signed a term sheet with Schlumberger Middle East and Patterson-UTI International Holdings for future partnership and support with the latest technology, specialist services and innovations in the unconventional energy drilling space.

“Utilising partnerships, innovative AI, digitalisation and advanced technologies we will unlock Abu Dhabi’s abundant energy resources, to drive value for the UAE,” said Abdulmunim Saif Al Kindy, ADNOC Upstream executive director and vice chairman of ADNOC Drilling.

The initial phase of unconventional energy development is expected to employ up to nine land rigs, of which five are already included in ADNOC Drilling’s fleet as of December 31, 2023. The contract is expected to start contributing to ADNOC Drilling’s revenue towards the second half of this year.

Abu Dhabi holds an estimated 220 billion barrels of unconventional oil and 460 trillion cubic feet of unconventional gas. “Abu Dhabi’s unconventional energy resources are among the world’s largest. This award, for 144 wells is just the beginning,” said Abdulrahman Abdulla Al Seiari, the CEO of ADNOC Drilling.

Meanwhile, ADNOC Drilling’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.

The company’s profit in the three months ended March 31 reached $275m, up 26 per cent YoY while its earnings before interests, taxes, depreciation and amortisation rose by 31 per cent to $437m.

Read: ADNOC Group to begin production at Ras Al Sadr gas field