ADNOC Drilling to acquire 10 hybrid power land rigs for $252m

ADNOC Drilling is set to acquire ten new-build hybrid power land drilling rigs for $252m, with the aim to increase its onshore capacity and meet ADNOC Group’s accelerated production capacity target.

The drilling firm said it would lease an additional four, bringing the total number of new rigs added to the fleet to 14.

ADNOC Drilling said the use of hybrid power solutions is an essential element of its decarbonisation strategy as part of the group’s broader commitment to reduce emissions of greenhouse gases, produced mainly by burning fossil fuels, by 25 per cent in 2030.

“As our growth trajectory accelerates and we continue to build our capacity and capabilities to drive shareholder returns, our commitment to the decarbonisation of our operations remains fundamental,” said Abdulrahman Abdullah Al Seiari, CEO of ADNOC Drilling.

The company said the hybrid power technology system stores energy in its batteries to use when there is a need for continuous power or to provide instant extra power when there is an increase in demand. This process allows a rig to reduce carbon emissions by as much as 15 per cent.

#ADNOCDrilling has agreed to purchase ten new-build hybrid power land rigs, which use technology capable of reducing emissions intensity per rig by up to 15%.

— ADNOC Group (@ADNOCGroup) March 2, 2023

The new hybrid power land drilling rigs will be integrated into the operational fleet by Q4 2023, with partial revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) contribution from 2024.

The company expects a full-year annual contribution from all rigs by 2025.

ADNOC Drilling, the largest national drilling company in the Middle East by fleet size, said the acquisition will expand its fleet to 142 rigs by the end of 2024.

The ten rigs use a high-capacity battery and engine automation in parallel with the rigs’ traditional diesel generators and each of the rigs will have the provision to be connected to the electrical grid with minimum adjustment. The rigs are built by China Petroleum Technology & Development Corporation.

ADNOC Drilling’s expansion plan

Meanwhile, ADNOC Drilling’s full net profit surged by 33 per cent in 2022 to $802mn, up from $604m in the same period a year earlier while increased to $2.67bn in 2022 from $2.27bn in 2021, driven by robust growth in both onshore drilling operations and oilfield services.

Read: ADNOC Drilling reports $802m net profit in 2022, reflecting a 33% YoY rise

The company also presented its first ever year-ahead guidance and it projected revenues of between $3bn and $3.2bn in 2023, representing year-on-year growth of up to 20 per cent.  The company expects a record net profit in 2023 of between $850mn and $1bn.

With a market capitalisation of Dhs54.4bn as of March 2, ADNOC Drilling was listed on the Abu Dhabi Securities Exchange (ADX) in 2021 after ADNOC Group, its majority shareholder, raised $1.1bn from investors through an initial public offering (IPO).

ADNOC Group listed petrochemical company Borouge, fertilisers and clean ammonia products maker Fertiglobe and ADNOC Drilling on the ADX over the past two years. The state-owned energy company raised $2.54bn from the public share sale of its gas unit after the IPO was increased to 5 per cent.

Also read: ADNOC Gas raises IPO size to $2.5bn on heavy demand