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ADNOC Awards Contracts Worth $3.6 Billion

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ADNOC Logo
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ADNOC Awards Contracts Worth $3.6 Billion

ADNOC Logo
ADNOC Logo

The Abu Dhabi National Oil Company (ADNOC) has awarded three contracts for the procurement of casing and tubing, whose combined scope is Dh13.2 billion ($3.6 Billion), one of the world's largest in this category.

The will maximize value for ADNOC across its drilling value chain and underpinning its strategy to deliver a more profitable upstream business.

The contracts – which were awarded to Consolidated Suppliers Establishment, representing Tenaris S.A. (from Luxembourg); Abu Dhabi Oilfield Services Company, representing Vallourec S.A. (from France); and Habshan Trading Company, representing Marubeni Corporation (from Japan) – have a combined scope of Dh13.2 billion ($3.6 billion) and the potential to achieve In-Country Value of over 50 per cent.

This includes more than Dh367 million ($100 million) in foreign direct investment, over the next five years, to establish a state-of-the-art oil country tubular goods (OCTG) threading plant and repair centre, and a training academy in Abu Dhabi to enhance local expertise and generate value for the UAE.

Under the terms of the contracts, the three companies will supply a combined total of 1 million metric tons of casing and tubing – which by comparison is equivalent to the distance from Abu Dhabi to Houston – over 5 years, to support ADNOC’s drilling activities.

The award marks the first in a series of drilling-related procurement expenditures with an overall value of Dh55 billion ($15 billion) that ADNOC plans to make in the next five years and is part of its Dh486 billion five-year capital expenditure (CAPEX) approved by Abu Dhabi’s Supreme Petroleum Council (SPC) in November 2018. The other procurement categories – excluding this award – are Downhole Completion Equipment, Wellheads, and X-Mas Trees, Liner Hangers, Drilling Fluids, Directional Drilling, Cementing, and Wireline Logging.

“The award of contracts with a combined scope that is one of the world’s largest for tubing and casing follows a highly competitive bid process. It underscores ADNOC’s optimisation efforts to drive commerciality across our growing portfolio,” said Abdulmunim Saif Al Kindy, ADNOC Upstream executive director.

“These agreements will provide ADNOC with increased flexibility to proactively respond to the demands of the evolving energy landscape as we ramp up our drilling activities and deliver our 2030 strategy,” he added

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Gulf Petrochemical Sector Faces Mounting Challenges Amid Global Shifts

A SABIC facility in Jilin, China (Company photo)
A SABIC facility in Jilin, China (Company photo)
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Gulf Petrochemical Sector Faces Mounting Challenges Amid Global Shifts

A SABIC facility in Jilin, China (Company photo)
A SABIC facility in Jilin, China (Company photo)

Over the past five years, the Gulf’s petrochemical industry has found itself at a critical juncture. A mix of rapid geopolitical developments, the lingering effects of the COVID-19 pandemic, and a slowdown in global economic growth, particularly in key markets like China and other parts of Asia, has disrupted longstanding business models and cast uncertainty over the future of the sector.

Industry experts and analysts, speaking to Asharq Al-Awsat, pointed to a convergence of four primary challenges facing Gulf petrochemical companies today. Among them are weak innovation strategies, limited domestic downstream capabilities, ongoing geopolitical volatility affecting supply chains, and increasingly stringent global environmental regulations on hydrocarbon-based products.

Fares Al-Qadheebi, an expert in international strategic partnerships and a member of the Saudi Economic Association, stressed that Gulf petrochemical firms must undergo a strategic transformation to remain viable.

He argued that the industry’s traditional reliance on government-subsidized feedstock is no longer sufficient in an evolving market landscape. For decades, these subsidies provided a competitive advantage. However, with subsidies gradually being phased out or restructured, companies now face mounting pressure to pivot toward higher-value, specialized products that align with strategic industries and evolving global demand.

The challenge, Al-Qadheebi said, lies in the sector’s historically low investment in research and development. Financial disclosures from several companies reflect limited R&D expenditure, resulting in a lag in innovation and product diversification. This hampers the ability of Gulf producers to shift from commodity chemicals to advanced materials that could drive future profitability.

At the same time, the region’s domestic manufacturing sector remains underdeveloped. Despite various industrial localization initiatives, Gulf countries continue to rely heavily on export markets, primarily China and India. This overreliance has left companies vulnerable to external shocks and market shifts, making it difficult to redirect surplus production into local value-added industries.

Geopolitical uncertainty is compounding the problem. Disruptions to global supply chains due to regional conflicts and shifting trade alliances have introduced logistical challenges and pricing volatility. This has forced some international buyers to seek alternative suppliers in more stable regions, undermining long-term relationships and jeopardizing the sector’s global competitiveness.

The rise of protectionist policies, particularly in the United States, has also led Gulf companies to reconsider their exposure to the American market and explore options such as relocating parts of their operations overseas.

Adding to the pressure are global environmental policies that increasingly target carbon-intensive products. Gulf producers are being pushed to develop low-emission technologies and environmentally compliant alternatives. While necessary, such changes significantly increase development and production costs and complicate market access.

Financial analyst Tareq Al-Atiq noted that these combined pressures have eroded profitability across much of the sector, with few signs of a swift recovery. He stressed the need for mergers, strategic alliances, and investments in carbon capture technologies to reduce operating costs and reposition the industry in growth markets, particularly in emerging economies with rising demand for plastics, fertilizers, and other petrochemical derivatives.

Looking ahead, experts suggest that the Gulf’s petrochemical giants must work more cohesively - potentially in an OPEC-style alliance - to coordinate production, innovation strategies, and market expansion efforts, or risk falling behind in an increasingly competitive global landscape.