ADNOC to invest Dh22 billion to boost oil sector
Abu Dhabi National Petroleum Company (ADNOC) has announced that it will invest Dh22 billion to boost the drilling sector. This will be done through a series of packages to increase the pace of drilling in the oil industries and, in turn, increase the capacity of drilling rigs. With this effort, the oil industries plan to harvest 5 million barrels per day by 2030.
Dr. Sultan bin Ahmed al Jaber, Minister of Industry and Advanced Technology, who is also the CEO of ADNOC, announced the news and said that "these huge investments in drilling equipment confirms our commitment to responsibly enhance the value of our hydrocarbon resources and thus, we will increase our production capacity to keep pace with the world's growing oil needs for the coming decades, especially as we are one of the least carbon intensive producers in the world. ADNOC has successfully executed the contracts, at competitive prices, and that will enable cost reductions and serve to support our overall efforts that will improve local value-add and increase profitability in all aspects of the company".
To carry out this exercise, procurement contracts have been set up with a group of leading companies that intend to implement the projects in the oil wells, investing mainly in the improvement of the tools needed to obtain the oil. The money will be spent on modernising drilling equipment, tools, well preparation, pipelines, casing supplies and cement stabilisation.
An investment of 3.3 billion dirhams is planned for the purchase of tools and equipment for drilling, preparation, and processing of oil. Furthermore, Dh3.6 billion will be used for the improvement of wellheads. Dh679 million will also be contributed to establish two facilities to develop in-house tools at lower cost, thereby improving local UAE production.
These record-breaking agreements have become the largest in the world by an oil company. The largest will last for ten years, some for five years. The first was signed with Schulumberger Middle East S.A. and Weatherford, which will be responsible for the purchase of drilling equipment, the preparation of the wells and signed for some 8.6 million dirhams. Secondly, Weathorford together with Uni-Arab Engineering & Oilfield Services will be in charge of having the casing conveyors and casing. And finally, Oilfield Supplies and Services, with other specialist groups in the sector, will be in charge of the cement part.
These agreements will enable ADNOC to consolidate its position as a major supply chain and allow it to drill thousands of new wells, while remaining the number one oil producer at a much lower cost than other countries. Such deals are also expected to reduce costs by hundreds of millions of dirhams.
Another sector that will be enriched by these improvements is gas production, which will have a share of the money earmarked for it. The contracts will produce around 60 per cent of their total value and will go to the region's economy through a programme created by the oil organisation, which will improve the lives of citizens working in the area by creating thousands of jobs. Crucially, more employment opportunities will be directly created for UAE citizens, which will enhance domestic manufacturing and further stimulate the growth of the private sector and our local industrial base," said Al Jaber.
ADNOC will be strengthened by these investments and they will also form part of the company's 2030 integrated smart growth strategy plan, which will enable the firm to keep up with the mechanisms and maintain its position in the market, providing great stability and confidence through the suppliers that will be part of the agreements.