The UAE's ADNOC Drilling Company has won a contract worth a total of AED 2.7 billion to provide and operate three rigs to support ADNOC's offshore expansion operations in the Zakum offshore field, according to a statement on Wednesday.
Abdulrahman Al Sayari, CEO of ADNOC Drilling, said: “We are very pleased to award this important contract to the company, which supports its rapid upward trajectory and has honorable implications that reflect the company’s leadership and confidence in its capabilities. Our new rigs will be the most advanced, as they are fully enhanced with artificial intelligence technologies, which is the most advanced technology of our time.”
He added: Our cooperation with a specialized and leading company such as Honghua Group will add a lot to the drilling industry by designing and building future rigs that will contribute to developing operational efficiency, enhancing safety, and achieving exceptional value for our customers in ADNOC Offshore.
Commenting on the award, Taiba Abdul Rahim Al Hashemi, CEO of ADNOC Offshore, said: “ADNOC Drilling’s expertise and enhanced technological capabilities are key enablers in accelerating the world’s growing energy needs in a safe and sustainable manner. This contract will cement our future partnership with ADNOC Drilling to leverage the latest AI technologies and innovations to increase energy and derivatives production, reduce emissions and deliver value to all our shareholders.”
The contract will follow existing agreements in terms of providing revenues that enhance long-term contractual returns and guaranteed internal rates of return. The contract calls for the operation of three new rigs on the existing and newly constructed artificial islands in the Zakum offshore field to drill and complete wells.
Honghua will build the new rigs and enable them with the latest AI and automation technologies, with delivery and start of operations expected in 2026. ADNOC Drilling and Honghua will design and build the new state-of-the-art rigs, harnessing the transformative nature of AI, digital and advanced technologies. The two companies are also exploring collaboration with AIQ, a leading AI company operating out of Abu Dhabi.
The rigs’ operating systems will be designed to be fed with real-time data on operating conditions and performance levels, enabling them to have a degree of autonomy and the ability to make decisions that contribute to enhancing rig efficiency, improving safety levels and delivery times. These rigs will operate on ADNOC’s innovative artificial islands, which provide an ideal environment for extended drilling operations. The five longest wells in the world have been delivered from these islands, the last of which exceeded 52,000 feet. The new rigs, which will provide extended drilling services, have advanced capabilities that enable them to move between wells easily and without the need for dismantling, a feature that improves efficiency, enhances safety and helps to significantly reduce emissions.
Total capital expenditure for the new rigs is approximately AED 771.2 million, with the majority of this concentrated in 2025. The first full year of revenue from the new rigs is expected to be 2027. The company’s financial outlook and forecast for full-year 2024 revenue for the island rigs segment, which currently operates 10 rigs, remains unchanged, ranging from AED 734.5 million to AED 918.1 million.
The acquisition of the new rigs is part of the company’s fleet expansion plan, which expects to increase the number of rigs in ADNOC Drilling’s fleet to at least 148 by 2026, including the three rigs subject to this contract, in addition to the three rigs previously announced for the initial phase of exploring unconventional energy sources. It is worth noting that ADNOC Drilling has invested more than AED 8 billion since its IPO in Q4 2021 to build one of the largest integrated drilling fleets in the world.
