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Wed 21 Aug 2019 02:51 PM

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UAE's Adnoc awards $3.6bn deals to support upstream growth

Abu Dhabi National Oil Company awards three contracts to help deliver a more profitable upstream business

UAE's Adnoc awards $3.6bn deals to support upstream growth

Abu Dhabi National Oil Company (Adnoc) announced on Wednesday the award of multi-billion dollar contracts for the procurement of casing and tubing as it drives value through its smart approach to procurement.

Adnoc said the combined scope of the three contracts awarded is one of the world’s largest in this category, maximising value for the company across its drilling value chain to deliver a more profitable upstream business.

The contracts – which were awarded to Consolidated Suppliers Establishment, representing Tenaris from Luxembourg; Abu Dhabi Oilfield Services Company, representing Vallourec from France; and Habshan Trading Company, representing Marubeni Corporation from Japan – have a combined scope of AED13.2 billion ($3.6 billion), a statement said.

This includes more than $100 million in foreign direct investment over the next five years to establish an oil country tubular goods threading plant and repair centre, and a training academy in Abu Dhabi to enhance local expertise.

Under the terms of the contracts, the three companies will supply a combined total of one million metric tons of casing and tubing – the equivalent of the distance from Abu Dhabi to Houston – over five years, to support Adnoc’s drilling activities.

The award marks the first in a series of drilling-related procurement expenditures with an overall value of AED55 billion that Adnoc plans to make in the next five years and is part of its AED486 billion five-year capital expenditure approved by Abu Dhabi’s Supreme Petroleum Council in November 2018.

bdulmunim Saif Al Kindy, Adnoc Upstream executive director, said: "The award of contracts with a combined scope that is one of the world’s largest for tubing and casing follows a highly competitive bid process. It underscores Adnoc’s optimisation efforts to drive commerciality across our growing portfolio.

"These agreements will provide ADNOC with increased flexibility to proactively respond to the demands of the evolving energy landscape as we ramp up our drilling activities and deliver our 2030 strategy," he added.

Adnoc plans to increase its conventional drilling by 40 percent by 2025 and substantially ramp up the number of its unconventional wells. This is part of its target to achieve four million barrels of oil production capacity per day (mmbpd) by the end of 2020 and five mmbpd by 2030.

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