Adnoc signs Dh120m rig deal with fleet size set to double

Abu Dhabi National Oil Company has signed a Dh120 million deal for a new rig as it doubles the size of its fleet.

The rig, to be built in the UAE by the American company National Oilwell Varco, is to serve Adnoc’s main onshore operator, which is working to increase output to 1.8 million barrels per day (bpd) in 2017 from around 1.5 million bpd today.

Overall, the emirate is targeting a rise in pumping capacity to 3.5 million bpd from 3 million today, which would give the Opec member more leeway to maintain a cushion of spare capacity. To reach that target, Abu Dhabi needs to more than double its rig count to 88 from last year's 40, say Adnoc officials.

The agreement was signed yesterday in Abu Dhabi by National Oilwell Varco and National Drilling Company (NDC), Adnoc’s rig subsidiary.

“NDC is committed to sustainable progress and continuous growth,” Abdalla Saeed Al Suwaidi, the chief executive, said in a press release published by the state news agency Wam.

He said that an earlier rig ordered from National Oilwell Varco, also built in the UAE, has already drilled its first well.

On Friday, the most recent day for trading, shares of National Oilwell Varco rose 1 per cent to $79.06.

Last month, NDC took delivery of a jackup rig from the local producer Lamprell, one of six offshore rigs scheduled for delivery this year.

Experts say the Middle East as a whole needs to double its rig fleet to meet its expansion targets.

Of the 88 rigs that Abu Dhabi hopes to have in service by 2018, more than half will be for onshore fields, where challenging techniques are required to maintain output at mature fields. Newcomers such as Korea National Oil Corporation and Wintershall are also exploring undeveloped sites.

Foreign companies are now awaiting the results of Adnoc’s auction of its prized onshore fields, which counted four legacy oil majors among its shareholders until January.

ayee@thenational.ae

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