Adnoc Drilling awarded $1.63 billion five-year contract

Adnoc Drilling has been awarded a five-year contract for integrated drilling services (IDS) worth $1.63 billion by Adnoc Offshore, as the company seeks to expand its offering.

The contract focuses on providing services such as directional drilling, drilling fluids, cementing, wireline logging and tubular running services at offshore wells, Adnoc Drilling said in a statement on Thursday to Abu Dhabi Securities Exchange, where its shares are traded. It also includes advanced engineering and technical support for the delivery of extended reach and maximum reservoir wells offshore.

“This ... award is a strong reflection of Adnoc Drilling’s long-term contracting model, which provides revenue visibility and stability over the contract period,” said Abdulrahman Al Seiari, Adnoc Drilling chief executive.

“It aligns with our disciplined approach to building a resilient business foundation, capable of generating consistent cash flow and supporting sustainable shareholder returns through the cycle.”

Adnoc Drilling is the largest integrated drilling services company in the Middle East by fleet size. It owned 142 rigs by the end of 2024, with three new island rigs on order for 2026. The company expects that to grow to at least 148 rigs by the end of 2026 and 151 by the end of 2028.

The growth of its IDS portfolio will support fleet utilisation, diversify revenue streams and accelerate sustainable and long-term growth and returns, the company said.

"The IDS business brings a relatively new and fast-growing revenue stream to Adnoc Drilling, significantly enhancing business resilience and future-proofing the company through the cycles."

Adnoc Drilling also expects more opportunities amid parent company Adnoc's global expansion plans.

Adnoc, responsible for most of the UAE’s oil production, is boosting its international presence and recently announced the launch of XRG, a lower-carbon energy and chemicals investment unit, with an enterprise value of more than $80 billion. In December, oil major BP and XRG announced the completion of a joint venture named Arcius Energy, which will initially focus on gas assets in Egypt.

“All of these ambitious international operations of Adnoc, by definition, open for us a lot of doors,” Youssef Salem, the chief financial officer of Adnoc Drilling, told The National in January.

Adnoc Drilling is also seeking contracts for drilling and oilfield services in Kuwait and Oman.

Last year, Adnoc Drilling teamed up with Alpha Dhabi Holding to launch Enersol, a tech-focused joint venture. It aims to invest $1.5 billion in technology-driven companies in the oilfield services sector by the end of 2025.

In the fourth quarter, the company reported a more than 21 per cent rise in profit to $399 million as revenue grew 41 per cent during the period due to newly operational land and offshore rigs.

It projects net profit of between $1.35 billion and $1.45 billion for 2025 and revenue of $4.6 billion to $4.8 billion.