In an announcement made by The Abu Dhabi National Oil Company (ADNOC), the organisation will be investing up to US$6bn in procurement awards to enable drilling growth. The investment comes as the ADNOC boosts its crude oil production capacity to five million barrels per day by 2030 and drives gas self-sufficiency for the UAE.
Invested in the form of procurement awards, ADNOC will be providing these awards to top-tier contractors for wellheads and related components, downhole completion equipment (DCE) and related services, and liner hangers and cementing accessories.
Investing in the UAE’s economy
With this investment, almost 60% of the total value could flow back into the UAE economy as part of ADNOC’s successful in-country value (ICV) programme over the duration of the awards.
In addition, over US$900mn worth of wellheads and over US$700mn worth of downhole completion equipment will be manufactured in the UAE as well as liner hangers; US$185mn in foreign investment (FDI) will flow into the UAE economy to establish two wellheads manufacturing and assembly facilities, enhance drilling-related equipment manufacturing and assembly, and enable local manufacturing of 20 new drilling completion products strengthening the UAE’s supply chain and vendor managed inventory.
“ADNOC’s world record investments in drilling-related equipment underlines our commitment to responsibly unlocking our world-scale hydrocarbon resources and expanding our production capacity to continue providing the world with some of the least carbon-intensive barrels for decades to come. The awards were secured at highly competitive rates, enabling substantial cost savings for ADNOC and underpinning our broader efforts to drive commerciality and value across our entire portfolio,” said His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO.
“Crucially, the awards will directly create more skilled employment opportunities for UAE Nationals, enhance domestic manufacturing and further stimulate the growth of the private sector and our local industrial base. This is yet another example of how ADNOC is working to support the growth and diversification of the UAE’s economy, in line with the Principles of the 50 and the Leadership’s wise directives.”
A breakdown of the procurement awards
- The award for wellheads and related components is worth up to US$3.27bn (the world’s largest in this category).
- The award for downhole completion equipment and related services is up to US$2.34bn (also the world’s largest in this category).
- The award for liner hangers and cementing accessories is worth up to US$337mn.
The awards are expected to enable hundreds of millions of dollars in savings, as well as form an integral part of the ADNOC’s 2030 strategy, optimising its procurement strategy to reflect market dynamics, and focusing on long-term contracts with a reduced number of suppliers for stable and reliable delivery.