ADNOC orders casing and tubing for $3.6B

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Abu Dhabi’s national oil firm ADNOC has awarded $3.6 billion worth of contracts to Vallourec, Tenaris, and Marubeni subsidiaries.

The three contracts are for delivery of casing and tubing. ADNOC said that the contracts had the potential to achieve “In-Country Value of over 50 percent,” including $100 million in foreign direct investment, over the next five years, to establish a state-of-the-art oil country tubular goods (OCTG) threading plant and repair center, and a training academy in Abu Dhabi to enhance local expertise and generate value for the UAE.

According to ADNOC, under the terms of the contracts, the three companies will supply a combined total of 1 million metric tons of casing and tubing. This is, ADNOC said, equivalent to the distance from Abu Dhabi to Houston. The goods will be delivered over a five-year period to support ADNOC’s drilling activities.

“The award marks the first in a series of drilling-related procurement expenditures with an overall value of AED 55 billion ($15 billion) that ADNOC plans to make in the next five years and is part of its AED 486 billion five-year capital expenditure (CAPEX) approved by Abu Dhabi’s Supreme Petroleum Council (SPC) in November 2018,” ADNOC said.

The other procurement categories – excluding this award – are Downhole Completion Equipment, Wellheads, and X-Mas Trees, Liner Hangers, Drilling Fluids, Directional Drilling, Cementing, and Wireline Logging.

Abdulmunim Saif Al Kindy, ADNOC Upstream Executive Director, said: “The award of contracts with a combined scope that is one of the world’s largest for tubing and casing follows a highly competitive bid process…These agreements will provide ADNOC with increased flexibility to proactively respond to the demands of the evolving energy landscape as we ramp up our drilling activities and deliver our 2030 strategy.”

ADNOC also said that the contracts would create employment opportunities for UAE nationals: “With more than AED 6.6 billion ($1.8 billion) value potential to flow back into the UAE’s economy, the awards will give significant stimulus to the country’s products and services and create additional skilled employment opportunities for UAE nationals. ”

“The combined scope of the awards is based on the forecasted requirement for casing and tubing across the ADNOC Group. The awards complement ADNOC’s substantial upstream growth plans and drive to deliver integrated drilling services as it plans to increase its conventional drilling by 40 percent by 2025 and substantially ramp up the number of its unconventional wells. This is part of its target to achieve 4 million barrels of oil production capacity per day (mmbpd) by the end of 2020 and 5 mmbpd by 2030,” ADNOC said.

Offshore Energy Today Staff


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Posted on August 21, 2019 with tags .

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