ADNOC awards $4bn IDFS contracts to enhance production capacity

2 November 2022

Abu Dhabi National Oil Company (ADNOC) has awarded three framework agreements valued at $4bn, to help expand its low-cost and low-carbon intensive production capacity.

The framework agreements were awarded for integrated drilling fluids services (IDFS).

ADNOC awards frame work deals for IDFS. (Credit: Abu Dhabi National Oil Company)
ADNOC awards frame work deals for IDFS. (Credit: Abu Dhabi National Oil Company)

ADNOC Drilling Company (ADNOC Drilling), Schlumberger Middle East (SLB) and Halliburton Worldwide (Halliburton) have secured the contracts.

IDFS include provision of products, engineering, technical laboratory support, filtration equipment, and solid control equipment, to expand oil production capacity.

Granted after a competitive tender process, the awards cover the company’s onshore and offshore fields for five years, with an option to extend by further two years.

Furthermore, ADNOC Drilling’s scope of works is valued at up to $1.6bn, which confirms the company’s transformation as a fully Integrated Drilling Services (IDS) company.

ADNOC upstream executive director Yaser Saeed Almazrouei said: “These record framework agreements for integrated drilling fluids services continue ADNOC’s significant investment in drilling-related services to enable the expansion of our production capacity and responsibly unlock the UAE’s leading low-cost, lower-carbon intensity hydrocarbons.

“In line with the wise directives of the UAE’s leadership, we are prioritizing in-country value as we respond to growing global demand for energy and these agreements will create skilled job opportunities for UAE Nationals in the private sector, drive domestic manufacturing and support the UAE’s industrial growth.”

ADNOC said the more than 80% of the award value would flow back into the UAE’s economy under its In-Country Value (ICV) programme.

In addition, the contractors will also create job opportunities for UAE natives and enable investment in local manufacturing of equipment, facilities, and chemicals for IDFS.

The framework agreements will support local manufacturing of Liquid Mud Plants and a Waste Management Facility, along with crucial commodity chemicals.

ADNOC said that its optimised procurement approach that focuses on longer-term contracts with optimal number of suppliers will enable hundreds of millions of dollars in cost savings.

Recently, ADNOC and Gas Authority of India Limited (GAIL) have teamed up to explore opportunities in liquefied natural gas (LNG) supply and decarbonisation.

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