ADNOC awards deals worth $3.6bln to boost production

  • Aug 21, 2019
  • Zawya

"It underscores Adnoc's optimisation efforts to drive commerciality across our growing portfolio. In addition, it is testament to our targeted approach to engage with value-add partners to unlock value as well as enhance the performance and returns on our assets and capital."

Al Kindy said the agreements would provide Adnoc with increased flexibility to proactively respond to the demands of the evolving energy landscape as it ramps up drilling activities and deliver its 2030 strategy.

"They will also generate substantial In-Country Value and provide attractive foreign direct investment opportunities for the private sector, further demonstrating Adnoc's commitment to creating sustainable value for the nation and its people, in line with the Leadership's wise directives."

The contracts were awarded to Consolidated Suppliers Establishment, representing Tenaris S.A. (from Luxembourg); Abu Dhabi Oilfield Services Company, representing Vallourec S.A. (from France); and Habshan Trading Company, representing Marubeni Corporation (from Japan).

With combined scope of Dh13.2 billion, those contracts have the potential to achieve In-Country Value of over 50 per cent. This includes more than Dh367 million in foreign direct investment, over the next five years, to establish a state-of-the-art oil country tubular goods threading plant and repair center, and a training academy in Abu Dhabi to enhance local expertise and generate value for the UAE.

"Under the terms of the contracts, the three companies will supply a combined total of one million metric tons of casing and tubing, which by comparison is equivalent to the distance from Abu Dhabi to Houston - over 5 years, to support Adnoc's drilling activities," the company said.

With more Dh6.6 billion value potential to flow back into the UAE's economy, the awards will give significant stimulus to the country's products and services and create additional skilled employment opportunities for UAE nationals.

"The award marks the first in a series of drilling-related procurement expenditures with an overall value of Dh55 billion that Adnoc plans to make in the next five years and is part of its Dh486 billion five-year capex approved by Abu Dhabi's Supreme Petroleum Council in November 2018.