Is the oil industry dead? Well, the Abu Dhabi National Oil Company (ADNOC) clearly thinks it isn’t. ADNOC announced a $1b investment in engineering agreements with eight top-tier global contractors. The framework agreements are part of the company’s 2030 strategy, which focuses on maximizing value from resources. The global contractors will allow ADNOC to raise output capacity to 5 million barrels a day, while delivering substantial cost savings (that’s quite an optimization if you ask us).
This news comes as ADNOC is employing an aggressive expansion strategy to increase production capacity (both onshore and offshore). Last week, the company invested $187m to expand its Al Nouf oil field, while last month $763.7m worth of contracts were awarded to expand production in the Upper Zakum and Satah Al Razboot oil fields. Overall, more than $1.5b worth of contracts have been awarded by ADNOC in just the last few months.
why it matters
As part of ADNOC’s commitment in the In-Country Value program (ICV), the framework agreements have the potential for 50% of their value to flow back into the UAE economy. Other than promoting GDP diversification, this means more job opportunities for UAE Nationals in the private sector and more opportunities for local businesses.