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UAE’s ADNOC Drilling Awarded $2 Billion Worth Contracts

The Salama drilling rig operates within a total of 115 rigs to enhance the production operations of ADNOC. (Asharq Al-Awsat)
The Salama drilling rig operates within a total of 115 rigs to enhance the production operations of ADNOC. (Asharq Al-Awsat)
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UAE’s ADNOC Drilling Awarded $2 Billion Worth Contracts

The Salama drilling rig operates within a total of 115 rigs to enhance the production operations of ADNOC. (Asharq Al-Awsat)
The Salama drilling rig operates within a total of 115 rigs to enhance the production operations of ADNOC. (Asharq Al-Awsat)

UAE’s ADNOC Drilling confirmed being awarded five 10-year contracts, totaling 7 billion dirhams ($2 billion), in support of ADNOC Offshore’s growing drilling operations.

The rigs will commence activity progressively from the end of 2023, with significant revenue expected in 2024 and the first full-year revenue contribution from 2025. The revenue associated with these contracts is included in the Company’s full-year 2023 and medium-term guidance.

“We are pleased to have been awarded these important contracts. Long-term contracts like these are the backbone of our business model, providing a clear line of sight on future earnings,” said Chief Executive Officer of ADNOC Drilling Abdulrahman Al Seiari.

“As we continue to grow our fleet, our shareholders will benefit from the opportunity to be directly invested in ADNOC’s accelerated production capacity growth, which is driving faster revenue growth and progressive, long-term shareholder returns while responding to the world’s rising energy demand.”

The five rigs have been acquired as part of the company’s fast-tracked rig fleet expansion program, designed to enable the delivery of ADNOC’s accelerated production capacity growth to responsibly meet rising global energy demand.

The new rigs will be among the most capable, high-specification rigs working in the Arabian Gulf.

Each of the five rigs will be equipped with a battery energy storage system to increase efficiency and reduce emissions. 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.

The new rigs are central to ADNOC Drilling’s rigorous decarbonization strategy and the company’s commitment to supporting ADNOC’s target to reduce greenhouse gas intensity by 25% by 2030, as well as the UAE Net Zero by 2050 strategic initiative.

The 7 billion dirhams ($2 billion) contract award follows more than 42.23 billion ($11.5 billion) in long-term contracts announced since the beginning of 2022.

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.