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The Abu Dhabi National Oil Company (ADNOC) announced record investments worth nearly $6 billion (AED 22 billion) to enable drilling growth as it ramps up its crude oil production capacity to 5 million barrels per day (mmbpd) by 2030 and drives the self-propelled gas. enough for the UAE.
The announcement was made at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) and follows ADNOC Drilling’s recent successful listing on the Abu Dhabi Securities Exchange (ADX).
The investments will come in the form of tenders to top contractors for Wellheads and related components, Downhole Completion Equipment (DCE) and related services, and Liner Hangers and Cementing Accessories – all crucial in oil and gas drilling and well completion.
Nearly 60% of the total value of the awards could flow back into the UAE economy over the lifetime of the awards under ADNOC’s successful In-Country Value (ICV) program.
In addition, in the UAE, more than $900 million (AED 3.3 billion) in wellheads and over $700 million (AED 2.6 billion) in downhole Completion Equipment will be manufactured in the UAE, as well as all liner hangers.
In addition, $185 million (AED 679 million) in Foreign Direct Investment (FDI) will flow into the UAE economy to establish two wellhead manufacturing and assembly facilities, improve production and assembly of drilling-related equipment, and increase local production of 20 enabling new drilling finish products strengthening the UAE’s drilling supply chain with supplier managed inventory.
The massive ICV resulting from this mega-price package directly supports the goals of the UAE’s Principles of the 50 to develop human capital and accelerate the development of a dynamic economy.
The tender price for wells and related components is worth up to $3.27 billion (AED12 billion), making it the world’s largest in its category. Gulf Automation Services & Oilfield Supplies (GASOS), UAE agents for TechnipFMC, and Al Ghaith Oilfield Supplies & Services Company, UAE agents for Baker Hughes, won the awards with both companies equally split of scope, which has a term of 10 years.
The purchase price for Downhole Completion Equipment and related services is worth up to $2.34 billion (AED 8.6 billion), also making it the world’s largest in its category. Schlumberger Middle East SA (Schlumberger) and Weatherford Bin Hamoodah Company LLC (Weatherford) took home the awards. Schlumberger’s size is valued at up to $1.41 billion (AED 5.18 billion), while Weatherford’s is valued at up to $931 million (AED 3.42 billion). The award has a term of five years with an option to extend for another two years.
The tender for Liner Hangers and Cementing Accessories is worth up to $337 million (1.24 billion AED) and will run for five years with an option to extend for another two years.
The liner hanger award was awarded to Weatherford Bin Hamoodah, agents in the UAE for Weatherford and Uni-Arab Engineering & Oilfield Service, agents in the UAE for Baker Hughes, while the award for cementing accessories was awarded to Al Ghaith Oilfield Supplies & Services Company Ltd, UAE Agents for Downhole Products, Best Pick General Trading LLC, UAE Agents for NeOz Energy and Al Mansoori Specialized Engineering LLC, UAE Agents for Sledgehammer.
The scope of the awards extends across the ADNOC Group and will provide ADNOC with a robust supply chain of drilling-related equipment to support its requirement to drill thousands of new wells while expanding its production capacity while maintaining its leading low-cost oil producer status.
The prices are expected to deliver hundreds of millions of dollars in cost savings. As an integral part of its 2030 strategy, ADNOC is optimizing its sourcing strategy to reflect market dynamics, focusing on long-term contracts with a limited number of suppliers that provide stable and reliable supplies at highly competitive rates.