Abu Dhabi National Oil Company (Adnoc) has awarded $3.6bn-worth of contracts for the procurement of oil field casing and tubing equipment as part of its strategy to adopt efficient procurement practices.

The contracts were awarded to the following UAE firms that have partnered with foreign oil field services firms:

  • Consolidated Suppliers Establishment, representing Tenaris (Luxembourg)
  • Abu Dhabi Oilfield Services Company, representing Vallourec (France)
  • Habshan Trading Company, representing Marubeni Corporation (Japan)

The procurement contracts have the potential to achieve In-Country Value (ICV) scores of more than 50 per cent, Adnoc said in a statement.

The ICV scope includes more than $100m in foreign direct investment over the next five years to establish an oil country tubular goods threading plant and repair centre, and a training academy in Abu Dhabi to enhance local expertise.

Under the terms of the contracts, the three companies will supply a combined total of 1 million metric tonnes of casing and tubing – equivalent to the distance from Abu Dhabi to Houston – over five years to support Adnoc’s drilling activities.

“The combined scope of the three contracts awarded is one of the world’s largest in this category, maximising value for Adnoc across its drilling value chain and underpinning its strategy to deliver a more profitable upstream business,” Adnoc said in its statement.

The award marks the first in a series of drilling-related procurement expenditures with an overall value of $15bn that Adnoc plans to make in the next five years. The deal is part of its $132bn five-year capital expenditure programme approved by Abu Dhabi’s Supreme Petroleum Council (SPC) in November 2018.

The other procurement categories – excluding this award – are downhole completion equipment, wellheads, X-mas trees, liner hangers, drilling fluids, directional drilling, cementing and wireline logging.

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