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The Abu Dhabi National Oil Company (ADNOC) has announced record investments worth up to almost $6 billion (AED22 billion) to enable drilling growth as it boosts its crude oil production capacity to 5 million barrels per day (mmbpd) by 2030 and drives gas self-sufficiency for the United Arab Emirates (UAE). The announcement was made at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) and follows the recent successful listing of ADNOC Drilling on the Abu Dhabi Securities Exchange (ADX).
The investments are in the form of procurement awards to top-tier contractors for Wellheads and related components, Downhole Completion Equipment (DCE) and related services, and Liner Hangers and Cementing Accessories – all crucial in drilling for oil and gas and completing wells.
Almost 60% of the total value of the awards could flow back into the UAE’s economy under ADNOC’s successful In-Country Value (ICV) program over the duration of the awards.
Furthermore, more than $900 million (AED3.3 billion) worth of wellheads and over $700 million (AED2.6 billion) worth of Downhole Completion Equipment will be manufactured in the UAE as well as all liner hangers. In addition, $185 million (AED679 million) in foreign direct investment (FDI) will flow into the UAE’s economy to establish two wellheads manufacturing and assembly facilities, enhance drilling-related equipment manufacturing and assembly, and enable local manufacturing of 20 new drilling completion products thereby strengthening the UAE’s drilling supply chain with vendor managed inventory.
The huge ICV resulting from this mega award package directly supports the objectives of the UAE’s Principles of the 50 to develop human capital and accelerate the development of a dynamic economy.
His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO, said:
'ADNOC’s world record investments in drilling-related equipment underlines our commitment to responsibly unlocking our world-scale hydrocarbon resources and expanding our production capacity to continue providing the world with some of the least carbon-intensive barrels for decades to come. The awards were secured at highly competitive rates, enabling substantial cost savings for ADNOC and underpinning our broader efforts to drive commerciality and value across our entire portfolio.
'Crucially, the awards will directly create more skilled employment opportunities for UAE Nationals, enhance domestic manufacturing and further stimulate the growth of the private sector and our local industrial base. This is yet another example of how ADNOC is working to support the growth and diversification of the UAE’s economy, in line with the Principles of the 50 and the Leadership’s wise directives.'
The procurement award for wellheads and related components is worth up to $3.27 billion (AED12 billion), making it the world’s largest in this category. Gulf Automation Services & Oilfield Supplies (GASOS), UAE agents for TechnipFMC, and Al Ghaith Oilfield Supplies & Services Company, UAE agents for Baker Hughes, secured the awards with both companies having an equal split of the scope which runs for 10 years.
The procurement award for Downhole Completion Equipment and related services is worth up to $2.34 billion (AED8.6 billion), also making it the world’s largest in this category.
Schlumberger Middle East S.A (Schlumberger) and Weatherford Bin Hamoodah Company L.L.C (Weatherford) secured the awards. Schlumberger’s scope is valued at up to $1.41 billion (AED5.18 billion) while Weatherford’s scope is valued at up to $931 million (AED3.42 billion).
The award runs for five years with an option to extend for two years.
The procurement award for Liner Hangers and Cementing Accessories is worth up to $337 million (AED1.24 billion) and runs for five years with an option to extend for two years.
The award for liner hangers was made to Weatherford Bin Hamoodah, UAE agents for Weatherford and Uni-Arab Engineering & Oilfield Service, UAE agents for Baker Hughes, while the award for Cementing Accessories was made to Al Ghaith Oilfield Supplies & Services Company Ltd, UAE agents for Downhole Products, Best Pick General Trading LLC, UAE agents for NeOz Energy, and Al Mansoori Specialized Engineering LLC, UAE agents for Sledgehammer.
The scope of the awards cut across the ADNOC Group and will provide ADNOC with a robust supply chain of drilling-related equipment to enable its requirement to drill thousands of new wells as it expands its production capacity while maintaining its leading low-cost oil producer status.
The awards are expected to enable hundreds of millions of dollars in cost savings. As an integral part of its 2030 strategy, ADNOC is optimizing its procurement strategy to reflect market dynamics, focusing on long-term contracts with a reduced number of suppliers that provide stable and reliable delivery at highly competitive rates.
Source: ADNOC
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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