The Abu Dhabi National Oil Company (ADNOC) announced it has awarded three contracts worth a combined AED 13.2 billion ($3.6 billion) for the procurement of casing and tubing.
The awarded projects are one of the world’s largest in this category as it reinforces value for ADNOC’s drilling value chain business and supports its strategy to boost profitability, according to a press release.
The contracts were awarded to Consolidated Suppliers Establishment, which represents Luxembourg’s Tenaris S.A., Abu Dhabi Oilfield Services Company that represents France’s Vallourec S.A., and Habshan Trading Company, representing Japan’s Marubeni Corporation.
The projects have the potential to achieve In-Country Value of more than 50%, including over AED 367 million ($100 million) in foreign direct investment (FDI) over the next five years, ADNOC noted.
Accordingly, a sophisticated oil country tubular goods (OCTG) threading plant and repair centre and a training academy would be established in Abu Dhabi to improve local expertise and generate value for the UAE.
Under the contracts, the three companies will supply a total of one million metric tonnes of casing and tubing – the equivalent of the distance from Abu Dhabi to Houston – over a five-year period to underpin ADNOC’s drilling activities.
These awarded projects represent the first part in a series of drilling-related procurement expenditures valued at a total AED 55 billion ($15 billion) that Adnoc plans to carry out in the coming five years.
This move is a part of the company’s AED 486 billion five-year capital expenditure plan approved by Abu Dhabi’s Supreme Petroleum Council in November 2018.
Furthermore, Adnoc aims to boost its conventional drilling by 40% by 2025 and substantially double the number of its unconventional wells as part of its target to increase its oil production capacity to four million barrels of per day (mbpd) by the end of 2020 and five mbpd by 2030.