Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has signed an agreement to purchase 10 newbuild hybrid power land drilling rigs for $252 million as part of its decarbonisation strategy.
The rigs, built by China Petroleum Technology & Development Corporation, use a high capacity battery and engine automation in parallel with the traditional diesel generators, the company said in a statement on Thursday.
They will progressively enter the company's fleet from the fourth quarter of this year, with a partial revenue and earnings before interest, tax, depreciation and amortisation contribution from 2024.
A full-year contribution from all rigs is expected in 2025, Adnoc Drilling said.
“These new rigs contribute to the capacity required to meet our customers’ expectations of maximum energy with minimal emissions”, Abdulrahman Al Seiari, chief executive of Adnoc Drilling, said.
“As our growth trajectory accelerates and we continue to build our capacity and capabilities to drive shareholder returns, our commitment to the decarbonisation of our operations remains fundamental.”
The use of hybrid power solutions is part of Adnoc Drilling’s decarbonisation strategy as the company contributes to Adnoc’s plan to reduce greenhouse gas intensity by 25 per cent by 2030.
The move also supports the UAE Net Zero by 2050 strategic initiative.
Adnoc, the company's majority shareholder, with an 84 per cent stake, has been taking several steps to reduce its carbon emissions.
In January, the company said it would invest $15 billion in decarbonisation projects by 2030, including clean power, carbon capture and storage, further electrification of operations, energy efficiency and new measures to build on its policy of zero routine gas flaring.
In December, the state energy company also set up a new low carbon solutions and international growth business division which will focus on renewable energy, clean hydrogen and carbon capture and storage, as well as international expansion in gas, liquefied natural gas (LNG) and chemicals.
Adnoc Drilling said the hybrid power technology system for the new rigs stores energy in its batteries to use when there is a need for continuous power, or to provide instant extra power when there is an increase in demand, reducing a rig’s greenhouse gas emissions intensity by 10 to 15 per cent.
Each of the rigs will have the provision to be connected to the electrical grid with minimum adjustment, depending on rig location and the availability of grid power, further reducing emissions, the statement said.
The new rigs are also part of efforts to increase Adnoc Drilling’s operational onshore capacity and accelerate its production capacity targets.
Last year, Adnoc's board endorsed plans to bring forward its production capacity target of 5 million barrels per day of crude to 2027, from 2030 previously.
Adnoc Drilling will also lease an additional four land rigs, bringing a total of 14 new rigs to its fleet, it said.
The hybrid rigs are the first to be acquired by Adnoc Drilling as part of the company's updated guidance, which will see a peak-owned rig count of 142 by the end of 2024, compared with the IPO guidance of 127 rigs by the end of 2030.
Adnoc Drilling, which listed on the Abu Dhabi Securities Exchange in 2021, posted a 33 per cent rise in 2022 net income to $802 million.
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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