Adnoc Drilling Company has been awarded, by Adnoc, a $1.7 billion contract to provide drilling and associated services for the recovery of unconventional energy resources.
To service the contract and explore the considerable future opportunities in unconventional resources, Adnoc Drilling has incorporated a new company, Turnwell Industries LLC OPC. The contract will see Turnwell deliver 144 unconventional oil and gas wells.
Adnoc Drilling has signed a term sheet to enter into a strategic partnership with Schlumberger Middle East SA (SLB) and Patterson-UTI International Holdings, subject to signing definitive agreements and any necessary regulatory approvals. The new company will be primarily engaged in unconventional drilling operations.
Abdulmunim Saif Al Kindy, Adnoc upstream executive director and vice chairman of Adnoc Drilling, said: “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 Drilling is perfectly placed to responsibly develop these resources. Utilising partnerships, innovative AI, digitalisation and advanced technologies, we will unlock Abu Dhabi’s abundant energy resources to drive value for the UAE.”
Abdulrahman Abdulla Al Seiari, chief executive officer of Adnoc Drilling, said: “Abu Dhabi’s unconventional energy resources are among the world’s largest. This award, for 144 wells is just the beginning. 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.”
Spearheading unconventional energy drilling development within the Middle East region and securing the UAE’s unconventional energy needs and resources, Adnoc Drilling will leverage cutting-edge innovations in AI smart drilling design, completions engineering, and production solutions. This will be enabled by Adnoc Drilling’s recent joint venture with Alpha Dhabi, Enersol, which will see its scalable technology ecosystem bolstered through investments in – and acquisitions of – AI-enabled solutions and innovative technologies.
This award marks the company’s latest endeavour to support the UAE’s position as a trusted and reliable energy provider and is a key step towards ensuring the nation’s gas growth ambitions. The award solidifies Adnoc Drilling’s leadership in the regional market while also providing a strong new revenue stream for the company.
This 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 December 31, 2023. The contract is expected to start contributing to Adnoc Drilling’s revenue towards the second half of this year.
The company’s full-year 2024 and mid-term guidance only captures this initial award, creating significant potential upside to our business and financials in the mid to long-term.
Unconventional energy refers to oil and gas resources trapped in subsurface reservoirs requiring additional technology and processes to unlock them. Today, Abu Dhabi holds an estimated 220 billion barrels of unconventional oil and 460 TCF of unconventional gas. The opportunity in unconventional energy presents outstanding scale with the production potential comparable to some of the most plentiful unconventional energy resources in the US.