ADNOC Drilling to expand rig network, operations across Middle East

Verity Ratcliffe, Bloomberg February 22, 2024

(Bloomberg) – Abu Dhabi-listed oil services company ADNOC Drilling Co. PJSC aims to expand its network of rigs and services into its neighboring countries.

The state-owned firm had been wanting to venture out since its 2021 IPO but expedited expansion plans of its parent company meant all its rigs had to go to sites in Abu Dhabi, Chief Financial Officer Youssef Salem said at a media briefing on Thursday.

All but one of the firm’s operational rigs are currently deployed in Abu Dhabi, with most serving its parent company. However, by the end of 2024, the company will have enough rigs to deploy outside of the United Arab Emirates too, Salem said. It will spend $750-950 million to acquire 15 rigs this year.

Oil and gas operators in the Gulf Cooperation Council group of countries represent the biggest opportunity because production is typically cheaper and pumping generates fewer emissions than in other regions, said Salem.

While the outlook for oil and gas in some countries is uncertain, Middle Eastern states plan to expand. ADNOC accelerated its program to raise its oil and gas production capacity and Qatar intends to increase its liquefied natural gas facilities by 64% by the end of the decade.

“For one reason or another other regions do not have the same level of visibility,” said Salem. As a result, they’re less likely to offer the longer-term contracts sought by oil services companies, he said.

ADNOC Drilling has been qualified to bid to supply rigs in Oman and is seeking approvals to be able to participate in tenders in Saudi Arabia and Kuwait, said Salem.

ADNOC remains the firm’s biggest shareholder while Baker Hughes holds 5% and 11% of its shares have been traded on the local stock exchange since 2021.

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