- Contracts to provide five high-spec offshore jack-up rigs in direct support of ADNOC’s accelerated production capacity growth
- Substantial revenue expected in 2024 with first full year revenue contribution from 2025
- Contracts provide accretive day rates while maintaining long-term cash flow and earnings visibility
ADNOC Drilling has confirmed the award of five 10-year contracts, totaling approx. $2 billion, in support of ADNOC Offshore’s growing drilling operations.
The contractual conditions, particularly the duration, were agreed with the client in light of the strength of the offshore jack-up market with higher day rates. The contracts supporting drilling operations across five fields in ADNOC’s offshore portfolio, are for the charter of five high-specification, premium jack-up rigs along with all required manpower and equipment.
The rigs will commence activity progressively from the end of 2023, with significant revenue expected in 2024 and first full-year revenue contribution from 2025. The revenue associated to these contracts is included in the Company’s full year 2023 and medium-term guidance.
Abdulrahman Abdulla Al Seiari, Chief Executive Officer of ADNOC Drilling, commented: 'We are pleased to have been awarded these important contracts. Long-term contracts like these are the backbone of our business model, providing clear line of sight on future earnings. As we continue to grow our fleet, our shareholders will benefit from the opportunity to be directly invested in ADNOC’s accelerated production capacity growth, which is driving faster revenue growth and progressive, long-term shareholder returns while responding to the world’s rising energy demand.'
The five rigs have been acquired as part of the Company’s fast-tracked rig fleet expansion program, designed to enable the delivery of ADNOC’s accelerated production capacity growth to responsibly meet rising global energy demand. The new rigs - SALAMAH(1), AL SAADIYAT, AL SILA, RAMHAN and YAS - will be among the most capable, high-specification rigs working in the Arabian Gulf.
Each of the five rigs will be equipped with a battery energy storage system to increase efficiency and reduce emissions. The hybrid power technology system stores energy in its batteries to use when there is a need for continuous power or to provide instant extra power when there is an increase in demand.
The new rigs are central to ADNOC Drilling’s rigorous decarbonization strategy and the Company’s commitment to support ADNOC’s target to reduce greenhouse gas intensity by 25% by 2030, as well as the UAE Net Zero by 2050 strategic initiative.
Today’s $2 billion contract award follows more than $11.5 billion in long-term contracts announced since the beginning of 2022.
(1) Rig Salamah is already counted in the 115 rig count as of March 31, 2023, hence only four of these jack-ups will be incremental to the rig count.
Source: ADNOC Drilling
