ADNOC awards $2 bil drilling contracts for sour gas project amid self-sufficiency goal

Abu Dhabi National Oil Co. has awarded $2 billion worth of drilling contracts to spur the development of the Hail and Ghasha sour gas project as part of its plans to help OPEC's third-biggest producer achieve gas self-sufficiency, it said in a statement on July 27.

ADNOC Drilling, in which the parent company has a stake, won the two contracts, ADNOC said.

The project is part of the Ghasha concession, the world's largest offshore sour gas development, which includes four artificial islands that have been completed. Production from Ghasha is expected to start around 2025 and ramp up to reach more than 1.5 bcf/d before the end of the decade

"ADNOC is committed to unlocking the UAE's abundant natural gas reserves to enable domestic gas self-sufficiency, industrial growth and diversification, as well as to meet growing global gas demand," ADNOC's CEO Sultan al-Jaber said in the statement.

ADNOC Logistics & Services, a unit of the parent company, was awarded a third contract, valued at $681 million, for the supply of offshore logistics and marine support services for the project.

The Ghasha concession comprises the Hail, Ghasha, Hair Dalma, Satah, Bu Haseer, Nasr, SARB, Shuwaihat, and Mubarraz fields. ADNOC's partners in the Ghasha concession are Eni (25%), Wintershall Dea (10%), OMV (5%), and Lukoil (5%).

Higher capex

"ADNOC's gas masterplan links every part of the gas value chain to ensure a sustainable and economic supply of natural gas to meet the growing requirements of the UAE and international markets through the expansion of ADNOC's LNG capacity," it said.

ADNOC is forging ahead with an expansion of its hydrocarbons and low-carbon businesses under a plan to spend Dirhams 466 billion ($127 billion) over 2022-2026.

The last five-year capex plan was for Dirhams 448 billion ($122 billion).

The spending, approved last year, will allow ADNOC to expand its upstream production capacity and downstream portfolio as well as its low carbon fuels business and clean energy ambitions.

Last year, ADNOC announced an increase in national reserves of 16 Tcf of natural gas, bringing the UAE's gas reserves to 289 Tcf.