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Adnoc Drilling wins $1.63bn contract from Adnoc Offshore

17 April 2025

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Adnoc Drilling has announced that its integrated drilling services unit has secured a contract worth $1.63bn from fellow Abu Dhabi National Oil Company (Adnoc Group) entity, Adnoc Offshore.

The five-year contract covers the provision of directional drilling, drilling fluids, cementing, wireline logging and tubular running, Adnoc Drilling said in a statement on 17 April.

“The award incorporates advanced engineering and technical support for the effective delivery of extended reach and maximum reservoir wells offshore,” Adnoc Drilling said.

“This contract supports the growing oil field services segment, and its economic impact is already included in the current 2025 and 2026 guidance, underpinning the visibility of Adnoc Drilling’s business model and in support of the company’s financial targets,” the Abu Dhabi Securities Exchange-listed company added.

For full-year 2024, Adnoc Drilling announced a net profit $1.3bn, a year-on-year increase of 26%.

The company’s full-year revenue grew 32% year-on-year to $4.03bn. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) also rose 36% year-on-year to $2.01bn.

Additionally, Adnoc Drilling said in its guidance for 2025 that it expects total revenue of $4.6bn-$4.8bn and Ebitda of $2.15bn-$2.3bn, with a margin range of 46%-48%. Net profit is expected to be $1.35-$1.45bn, with a margin range of 28%-30%.

The company expects capital expenditure in 2025 of $350m-$550m and a free cash flow (excluding mergers and acquisitions) of $1.3bn-$1.6bn, while maintaining a conservative leverage target of up to 2.0x net debt/Ebitda.

In 2025, Adnoc Drilling intends to enhance its operational capacity, projecting a rig count of over 148 by 2026 and more than 151 by 2028.

The company revealed it has secured a contract extension in Jordan and achieved prequalification in Kuwait and Oman, “paving the way for further regional expansion in 2025”.

In light of the positive financial results in 2024, Adnoc Drilling approved a cash dividend payment of $394m, bringing total dividends for the year to $788m, representing a 10% year-on-year increase.

Looking ahead, Adnoc Drilling said it seeks to increase dividends to at least $867m for 2025, and reach at least $1.15bn by 2028, based on its minimum 10% year-on-year dividend increase policy.

Growth through acquisitions

Achieving inorganic growth through strategic acquisitions is a key aspect of Adnoc Drilling’s expansion blueprint.

With this in mind, Adnoc Drilling partnered with Abu Dhabi-based Alpha Dhabi Holdings in November 2023 to establish Enersol, which has a mandate to invest up to $1.5bn in acquisitions.

To date, Enersol has announced acquisitions worth approximately $800m to acquire majority stakes in four technology-enabled oil field service companies, and “looking ahead, it aims to solidify its position as an AI [artificial intelligence]-centric investment company”, Adnoc Drilling said.

Enersol completed a transaction it started last July to acquire the majority 51% stake in UAE-based oil and gas services provider NTS Amega. The value of the transaction is estimated to be $58m.

Enersol also closed a transaction with UK-based private equity firm Dunedin to fully acquire US-headquartered EV Holdings. The transaction, started in August, is valued at $45m.

The joint venture then completed a transaction worth $207m to acquire the majority 42.205% stake in US oil and gas drilling services provider Gordon Technologies. Following the completion of the transaction in September, Enersol owns 67.205% of shares in the US firm.

ALSO READ: Abu Dhabi AI firm and SLB sign cooperation agreement

During the last quarter of 2024, Enersol signed an agreement to acquire a 95% equity stake in US-based Deep Well Services for $223m.

Separately, Adnoc Drilling said Turnwell Industries, its joint venture with the Middle East arm of US oil field services provider SLB and US firm Patterson-UTI International Holdings, has made progress with work on a $1.7bn contract awarded by Adnoc Group last May to provide drilling and associated services for the recovery of unconventional oil and gas resources in Abu Dhabi. 

Turnwell has delivered a total of 30 wells to Adnoc to date as part of its scope of work, with the initial wells delivered within 16 days of the contract award.

The broad scope of work on the contract covers drilling and appraisal of a total of 144 unconventional oil and gas wells.

Abu Dhabi is estimated to hold unconventional resources of 220 billion barrels of oil and 460 trillion cubic feet of gas in place.

ALSO READ: Abu Dhabi AI firm and SLB sign cooperation agreement

MEED’s May 2025 report on the UAE includes:

> GOVERNMENT & ECONOMY: UAE looks to economic longevity
> BANKING: UAE banks dig in for new era
> UPSTREAM: Adnoc in cruise control with oil and gas targets
> DOWNSTREAM: Abu Dhabi chemicals sector sees relentless growth
> POWER: AI accelerates UAE power generation projects sector
> CONSTRUCTION: Dubai construction continues to lead region
> TRANSPORT: UAE accelerates its $60bn transport push

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Indrajit Sen

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