The three companies will support ADNOC’s drilling activities over five years by supplying casing and tubing
Image: ADNCO intends to deliver more profitable upstream business. Photo: courtesy of Abu Dhabi National Oil Company.
The Abu Dhabi National Oil Company (ADNOC) has awarded contracts worth AED13.2bn (£2.9bn) for wells and drilling materials.
The three contracts are expected to maximise the state-owned oil company’s value across its drilling value chain and support its strategy to boost upstream business.
The contracts have been awarded to Consolidated Suppliers Establishment, representing Tenaris; Abu Dhabi Oilfield Services Company, representing Vallourec; and Habshan Trading Company, representing Marubeni-Itochu Steel.
Three companies to supply 1 million metric tonnes of casing and tubing
Under the contracts, the three companies will be responsible for supplying a total of 1 million metric tonnes of casing and tubing in order to support ADNOC’s drilling activities over five years.
ADNOC upstream executive director Abdulmunim Saif Al Kindy 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 optimization 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.
“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.”
The contracts represents the first in a series of ADNOC’s overall AED55bn (£12.3bn) drilling-related procurement expenditure plan in the next five years.
Last year, ADNOC secured approval for an investment of AED486bn (£108.9bn) from the Abu Dhabi’s Supreme Petroleum Council (SPC) aimed at ramping up its production capacity.
The investment will allow ADNOC to implement its new integrated gas strategy and boost its oil production capacity to 4 million barrels per day (mmbpd) by 2020-end and 5mmbpd by 2030.
As part of the new gas strategy, the firm plans to develop the Hail, Ghasha and Dalma project to exploit Abu Dhabi’s Arab formation, which is estimated to contain multiple trillions of cubic feet of recoverable gas.
The sour gas recovery project is projected to yield a production in excess of 1.5 billion cubic feet of gas per day.