ADNOC Drilling Forms New Firm to Complete 144 Unconventional Wells
- by Rigzone
- May 14, 2024
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ADNOC Drilling has secured a $1.7 billion contract to provide drilling and associated services for the recovery of unconventional energy resources.
Image by Alexey Zakirov via iStock
ADNOC Drilling Company PJSC, has secured a $1.7 billion contract from its parent company Abu Dhabi National Oil Company (ADNOC) to provide drilling and associated services for the recovery of unconventional energy resources.
To execute the contract, ADNOC Drilling has incorporated a new company, Turnwell Industries LLC OPC, to drill and complete 144 unconventional oil and gas wells for ADNOC, according to a news release Monday.
Further, ADNOC Drilling signed a non-binding term sheet to enter into a strategic partnership with Schlumberger Middle East SA (SLB), a subsidiary of SLB and Patterson-UTI International Holdings, Inc.
Subject to the execution of definitive agreements and any necessary regulatory approvals, Patterson-UTI and Schlumberger Middle East SA will hold a minority equity interest in Turnwell, according to the release.
Meanwhile, ADNOC Drilling also entered into a strategic joint venture with Alpha Dhabi called Enersol, enabling scalable innovative technologies to support cutting-edge AI smart drilling design, completions engineering, and production solutions.
The initial phase of unconventional development is expected to employ up to nine land rigs, of which five are already included in ADNOC Drilling’s fleet as of the end of 2023. The contract is expected to start contributing to ADNOC Drilling’s revenue towards the second half of this year. Abu Dhabi holds an estimated 220 billion barrels of unconventional oil and 460 TCF of unconventional gas in place, according to the news release.
”Our goal at ADNOC is to provide the energy and energy products that people depend on every day to power their lives and ensure a just, orderly and equitable energy transition. This award will accelerate the development of Abu Dhabi’s world-class resources to meet the world’s growing demand for affordable, accessible energy,” ADNOC Upstream Executive Director and Vice Chairman of ADNOC Drilling Abdulmunim Saif Al Kindy said. “ADNOC Drilling is perfectly placed to responsibly develop these resources. Utilizing partnerships, innovative AI, digitalization and advanced technologies we will unlock Abu Dhabi’s abundant energy resources, to drive value for the UAE [United Arab Emirates]”.
“Abu Dhabi’s unconventional energy resources are among the world’s largest. This award, for 144 wells is just the beginning,” ADNOC Drilling CEO Abdulrahman Abdulla Al Seiari said. “It represents a transformational opportunity for ADNOC Drilling as the UAE’s world-class unconventional energy resources will require many thousands more wells and we are in a prime position to deliver them”.
"It represents a significant expansion of our operations and specialist capabilities and to help us with that, we have set up a new company called Turnwell, and have signed a term sheet with SLB and Patterson-UTI, for potential partnership and support with the latest technology, specialist services and innovations in the unconventional energy drilling space subject to signing definitive agreements and any necessary regulatory approvals,” he added.
Patterson-UTI Comments
"We are pleased that ADNOC Drilling recognizes Patterson-UTI as a premier drilling and completions company and technology leader, and we look forward to reaching an agreement to bring our expertise to the initial phase of this groundbreaking project," Patterson-UTI CEO Andy Hendricks said in a separate news release.
"We are excited by the opportunity to partner with ADNOC Drilling and SLB to improve our position in one of the most important oil and gas regions in the world. There is a vast unconventional resource that is expected to be developed in the United Arab Emirates over many years, and we are confident that our expertise and knowledge from our experience in the United States can help Turnwell deliver to the customer U.S. shale type efficiencies to the drilling and completions process," Hendricks added.
"I am excited about this potential opportunity to allow Patterson-UTI to grow our presence in the Middle East in a capital efficient manner, as we do not expect to initially contribute any capital equipment. We also do not expect this opportunity to change our previously announced capital expenditure budget or impact our expectation to return at least $400 million to shareholders in 2024 through dividends and share repurchases,” Hendricks continued.
“We will continue to be strategic about our capital deployment and this potential opportunity with ADNOC Drilling allows us to participate in the early stages of a project that could provide substantial growth prospects over the course of many years. We think this opportunity has the potential to create significant value for our partners, the customer, and our shareholders,” he concluded.
The contract award marks a significant step in recovery of Abu Dhabi’s unconventional energy resources underlining the UAE’s role [in] meeting the world’s growing demand for affordable, accessible energy, ADNOC noted.
Patterson-UTI describes itself as one of the leading oilfield services companies in North America and has been heavily involved in the development of U.S. unconventional energy resources, including contract drilling services, integrated well completion services and directional drilling services.
To contact the author, email rocky.teodoro@rigzone.com
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