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ADNOC lead UAE smart procurement program with $3.6 billion OCTG contracts

22/08/2019
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Abu Dhabi National Oil Company (ADNOC) have awarded contracts worth $3.6 billion for the procurement of casing and tubing, with the intention of driving value through their smart procurement program.

ADNOC's contracts for $3.6 billion of casing and tubing is the first in a series of awards as part of their smart procurement program that will drive value through their significant growth plans
(Image via ADNOC)

The program is intended to facilitate ADNOC’s ambitious upstream growth plans. The value of the combined contracts is based on the forecasted requirement for casing and tubing across the group, as they drive to deliver integrated drilling services reaching 4 million barrels of oil capacity per day by the end of 2020, and 5mmbpd by 2030. 

The company intend to do this by increasing conventional drilling 40% by 2025 while also expanding their production from unconventional sources.

The awarded contracts will commit three companies to supply a combined total of 1 million metric tons of casing and tubing over five years. The contracts were awarded to Consolidated Suppliers Establishment, representing Tenaris S.A.; Abu Dhabi Oilfield Services Company, representing Vallourec S.A.; and Habshan Trading Company, representing Marubeni Corporation.

This is the first in a series of drilling-related procurement expenditures that are expected to reach an overall value of $15 billion over the next five years. In addition, further investment will establish a state-of-the-art oil country tubular goods threading plant and repair centre, and a training academy in Abu Dhabi to enhance local expertise and generate value for the UAE.

“The award of contracts with a combined scope that is one of the world’s largest for tubing and casing follows a highly competitive bid process. It underscores ADNOC’s optimization efforts to drive commerciality across our growing portfolio. In addition, it is testament to our targeted approach to engage with value-add partners to unlock value as well as enhance the performance and returns on our assets and capital," said Abdulmunim Saif Al Kindy, ADNOC's Upstream Executive Director.

“These agreements will provide ADNOC with increased flexibility to proactively respond to the demands of the evolving energy landscape as we ramp up our drilling activities and deliver our 2030 strategy. They will also generate substantial In-Country Value and provide attractive foreign direct investment opportunities for the private sector, further demonstrating ADNOC’s commitment to creating sustainable value for the nation and its people, in line with the Leadership’s wise directives.”

The contract awards, and the larger program, are expected to bring significant value to the UAE economy and drive job opportunities for UAE nationals.

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ADNOC lead UAE smart procurement program with $3.6 billion OCTG contracts - Time to read 3 min
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