UAE’s Abu Dhabi National Oil Company (ADNOC) has awarded three framework agreements valued at $4 billion for integrated drilling fluids services (IDFS) to support the ongoing expansion of its production capacity as it responds to the growing global demand for energy.
Announcing the awards on Tuesday, ADNOC said they were the largest of their kind in the industry. They were awarded to ADNOC Drilling , Schlumberger ( SLB ), and Halliburton and they cover ADNOC’s onshore and offshore fields. The agreements will run for five years with an option for a further two years.
The contractors will create job opportunities for UAE Nationals and invest in local manufacturing of equipment and chemicals required for the IDFS.
Yaser Saeed Almazrouei , ADNOC Upstream Executive Director, 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.”
The framework agreements were awarded following a competitive tender process. They will enable hundreds of millions of dollars in cost savings through ADNOC’s optimized procurement approach that focuses on longer-term contracts with an optimal number of suppliers that can reliably deliver at competitive rates.
The agreements will enable investment in local manufacturing of equipment and facilities, including in Liquid Mud Plants and a Waste Management Facility, as well as key commodity chemicals, underscoring ADNOC’s efforts to create long-term opportunities in the UAE’s manufacturing sector and drive industrial growth.
ADNOC Drilling’s scope of the framework agreements is valued at up to $1.6 billion (AED5.87 billion). This reflects the company’s transformation and expansion of its service profile into a fully Integrated Drilling Services (IDS) company, following the development of its Oilfield Services division in partnership with Baker Hughes.
Since November 2021, ADNOC has awarded over $16 billion (AED 58.72 billion) in agreements for drilling-related equipment and services, including these awards and other agreements for wellheads, downhole completion equipment, liner hangers, cementing service, wireline logging, directional drilling and logging while drilling.
IDFS are necessary to drill the wells that will enable ADNOC to expand its oil production capacity and drive gas self-sufficiency for the UAE. Some of these services include the provision of products, engineering, technical laboratory support, filtration equipment and solid control equipment.