The rigs will start activity progressively from the end of this year, generating significant revenue in 2024 and providing first full-year revenue contribution from 2025
The contracts support drilling operations across five fields in ADNOC’s offshore portfolio. (Credit: Keri Jackson from Pixabay)
ADNOC Drilling Company has officially announced the successful acquisition of five ten-year contracts valued at around $2bn. These contracts are specifically aimed at bolstering ADNOC Offshore’s expanding drilling operations.
The duration of the agreements was carefully negotiated with the client, taking into account the robustness of the offshore jack-up market, which has led to higher day rates. The contracts entail the provision of five premium jack-up rigs, designed to meet high specifications, in addition to the necessary workforce and equipment, to support drilling operations across five fields in ADNOC’s offshore portfolio.
The rigs are planned to start operations gradually from late 2023, with substantial revenue anticipated in 2024. It is projected that the first full-year revenue contribution will occur in 2025.
ADNOC Drilling CEO Abdulrahman Abdulla Al Seiari said: “We are pleased to have been awarded these important contracts. Long-term contracts like these are the backbone of our business model, providing clear line of sight on future earnings.
“As we continue to grow our fleet, our shareholders will benefit from the opportunity to be directly invested in ADNOC’s accelerated production capacity growth, which is driving faster revenue growth and progressive, long-term shareholder returns while responding to the world’s rising energy demand.”
As part of its rapid expansion programme for the rig fleet, ADNOC Drilling Company has acquired the five rigs, namely SALAMAH, AL SAADIYAT, AL SILA, RAMHAN, and YAS.
A new feature of each of these five rigs is the inclusion of a battery energy storage system, which serves to enhance efficiency and reduce emissions. This hybrid power technology enables the storage of energy within the rig’s batteries. This stored energy can be utilised during periods when a continuous power supply is required or when there is a sudden surge in demand, allowing for immediate additional power supply.
ADNOC Drilling Company places significant importance on its decarbonisation strategy, and the newly acquired rigs play a vital role in achieving this objective. These rigs are instrumental in supporting ADNOC’s ambitious target of reducing greenhouse gas intensity by 25% by the year 2030, aligning with the UAE Net Zero by 2050 strategic initiative.
The recent $2bn contract award represents another milestone for the company, following a series of substantial achievements. Since the start of 2022, ADNOC Drilling has already announced long-term contracts exceeding $11.5bn.