The Abu Dhabi National Oil Company (ADNOC) announced today that it has awarded a $1.7 billion contract to its drilling subsidiary for the development of 144 unconventional oil and gas wells in the UAE.
The contract represents the latest effort to tap into Abu Dhabi’s tight oil and gas reserves estimated to be around 220 billion bbl of oil and 460 Tcf of gas. The contract will be fulfilled by a new arm of ADNOC Drilling called Turnwell Industries which will oversee the unconventional drilling operations.
The project's initial phase is set to utilize nine drilling rigs, five of which are already part of ADNOC’s fleet. The company plans to use the latest advances in artificial intelligence technologies for drilling design, completions engineering, and the production phase.
Abdulmunim Saif Al Kindy, the upstream executive director and vice chairman of ADNOC Drilling, stated, “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.”
Additionally, ADNOC has entered into nonbinding partnerships with global service providers Schlumberger Middle East S.A. (SLB) and Patterson-UTI. These agreements, which are awaiting finalization and regulatory approval, could see SLB and Patterson-UTI acquiring minority stakes in Turnwell.
Patterson-UTI said in its own announcement that the potential agreement would involve exchanging equity and an unspecified amount of cash for sharing its expertise in drilling, completion, and other oilfield services with Turnwell.
The Houston-based service company also said the agreement will not initially include any of its drilling or completions equipment. However, the company suggested that such an investment might be considered in the future if the economics of the deal appeared promising.
Andy Hendricks, Patterson-UTI's CEO, said in a statement, "There is a vast unconventional resource that is expected to be developed in the United Arab Emirates over many years, and we are confident that our expertise and knowledge from our experience in the United States can help Turnwell deliver to the customer US shale type efficiencies to the drilling and completions process."
ADNOC launched an unconventional exploration program in 2016 and in November 2020 announced that it achieved production of tight gas with its partner TotalEnergies. ADNOC’s goal is to produce 1 Bcf/D from its unconventional prospects by 2030.
