Adnoc Drilling signs $252 million deal

Adnoc Drilling Company (Adnoc Drilling) on Thursday announced that it has signed an agreement to purchase ten newbuild hybrid power land drilling rigs (the rigs) for a total of $252 million.

The use of hybrid power solutions is an essential element of Adnoc Drilling’s rigorous decarbonization strategy as the Company contributes to Adnoc’s commitment to reduce greenhouse gas intensity by 25% by 2030, as well as the UAE Net Zero by 2050 strategic initiative.

The rigs use a high capacity battery and engine automation in parallel with the rigs’ traditional diesel generators. 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, reducing a rig’s greenhouse gas emissions intensity by 10%-15%.

Each of the rigs will have the provision to be connected to the electrical grid with minimum adjustment, depending on rig location and the availability of grid power, further reducing emissions.

Abdulrahman Abdullah Al Seiari, Chief Executive Officer of Adnoc Drilling, said: “This is yet another exciting step for Adnoc Drilling - these new rigs contribute to the capacity required to meet our customers’ expectations of maximum energy with minimal emissions. As our growth trajectory accelerates and we continue to build our capacity and capabilities to drive shareholder returns, our commitment to the decarbonization of our operations remains fundemental.’’

These new rigs are central to increasing Adnoc Drilling’s operational onshore capacity and are a direct response to Adnoc’s accelerated production capacity targets. The Company is a key enabler of Adnoc’s accelerated production capacity targets of five million barrels of lower carbon intensity crude per day by 2027, and achieving gas self-sufficiency for the UAE.

The rigs will progressively enter the fleet from the fourth quarter of this year, with partial revenue and EBITDA contribution from 2024 and full year annual contribution from all rigs in 2025. They are the first new land rigs acquired as part of updated guidance which will see peak-owned rig count of 142 by the end of 2024, which compares to IPO guidance of 127 rigs by the end of 2030.