Adnoc Review

Adnoc and Baker Hughes working together on drilling business

Adnoc and Baker Hughes working together on drilling business

Smart solutions bring great value

Adnoc is welcoming partnerships with foreign companies that can add value to its upsteam oil and gas business


As part of Adnoc’s initiative to secure smart procurement solutions that add value to its upstream oil and gas drilling business and promote in-country investment and service provision, the company announced the award of multi-billion-dollar contracts for the procurement of casing and tubing.

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

The contracts, which went to Consolidated Suppliers Establishment, representing Tenaris from Luxembourg; Abu Dhabi Oilfield Services Company, representing Vallourec (France); and Habshan Trading Company, representing Marubeni Corporation (Japan), have a combined scope of Dh13.2 billion ($3.6 billion) and the potential to achieve ICV of over 50 per cent.

This includes more than Dh367 million ($100 million) in foreign direct investment, over the next five years, to establish a state-of-the-art oil country tubular goods (OCTG) threading plant and repair centre, and a training academy in Abu Dhabi to enhance local expertise and generate value for the UAE.

Under the terms of the contracts, the three companies will supply a combined total of 1 million metric tons of casing and tubing – which by comparison is equivalent to the distance from Abu Dhabi to Houston – over 5 years, to support Adnoc’s drilling activities.

Tenaris alone was awarded a $1.9-billion long-term contract for the provision of tubulars and Rig Direct. In order to better serve Adnoc, Tenaris will expand its footprint in Abu Dhabi by installing a premium threading facility and upgrading its Rig Direct Service Center.

The award marks the first in a series of drilling-related procurement expenditures with an overall value of Dh55 billion ($15 billion) that Adnoc plans to make in the next five years and is part of its Dh486 billion five-year capital expenditure. The other procurement categories include downhole completion equipment, wellheads, and x-mas trees, liner hangers, drilling fluids, directional drilling, cementing, and wireline logging.

“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,” says Abdulmunim Saif Al Kindy, Adnoc Upstream Executive Director.

With more than Dh6.6 billion ($1.8 billion) value potential to flow back into the UAE’s economy, the awards will give significant stimulus to the country’s products and services and create additional skilled employment opportunities for UAE nationals.

Pursuant to the smart growth strategy, Adnoc in November embarked on one of the largest predictive maintenance projects in the oil and gas industry in partnership with Honeywell.

Under the terms of a 10-year partnership agreement, Adnoc will utilise Honeywell’s state-of-the-art asset monitoring and predictive analytics platform to maximise asset efficiency and integrity across its upstream and downstream operations.

Leveraging artificial intelligence technologies such as machine learning and digital twins, the platform will help predict equipment stoppages, reduce unplanned equipment maintenance and downtime, increase reliability and safety and enable substantial cost savings for the Adnoc.

Meanwhile in June, the oil giant awarded Subsurface Imaging, part of CGG’s Geoscience division, a landmark processing contract to perform high-end time and depth imaging of massive volumes of very high-spec data from what is believed to be the world’s largest ocean-bottom node (OBN) seismic survey to date.

The CGG will process a minimum 20,000 sq km of high-density wide-azimuth OBN seismic data at its Abu Dhabi geoscience center.

Carrying forward with its ICV strategy, Adnoc is keen to develop its human resources and at the top of that is developing UAE nationals for various positions in the energy sector.

For that, it has signed an agreement with Schlumberger to recruit and invest in the training of UAE nationals for the company’s oil and gas services business. Schlumberger has the ambition to increase its Emirati workforce, with the potential of up to 1,000 new job hires, driven by the company’s existing businesses as well as further expansions.

More Stories