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ADNOC Invests Over $750m in Developing Artificial Islands in Abu Dhabi

ADNOC’s investment in drilling wells falls under its pursuit to support its production capacity expansion to 5 million barrels per day (mmbpd) by 2030. Asharq Al-Awsat Arabic
ADNOC’s investment in drilling wells falls under its pursuit to support its production capacity expansion to 5 million barrels per day (mmbpd) by 2030. Asharq Al-Awsat Arabic
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ADNOC Invests Over $750m in Developing Artificial Islands in Abu Dhabi

ADNOC’s investment in drilling wells falls under its pursuit to support its production capacity expansion to 5 million barrels per day (mmbpd) by 2030. Asharq Al-Awsat Arabic
ADNOC’s investment in drilling wells falls under its pursuit to support its production capacity expansion to 5 million barrels per day (mmbpd) by 2030. Asharq Al-Awsat Arabic

Abu Dhabi National Oil Company (ADNOC) announced an investment of $763.7 million (AED2.8 billion) in integrated rigless services across six of its artificial islands in the Upper Zakum and Satah Al Razboot (SARB) fields to support its production capacity expansion to 5 million barrels per day (mmbpd) by 2030.

The investment is in the form of three contracts awarded by ADNOC Offshore to Schlumberger, ADNOC Drilling, and Halliburton after a competitive tender process.

Schlumberger’s share of the award is valued at $381.18 million (AED1.4 billion); ADNOC Drilling’s share is valued at $228.71 million (AED839.58 million), and Halliburton’s share is valued at $153.87 million (AED564.85 million).

Over 80 percent of the total award value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program over the 5-year duration of the contracts.

ADNOC Upstream Executive Director Yaser Saeed Almazrouei said: “These important awards for integrated rigless services will drive efficiencies of drilling and related services and optimize costs in our Offshore operations as we ramp up our drilling activities to increase our production capacity and enable gas self-sufficiency for the UAE.”

The scope of the contracts includes coiled tubing services with thru-tubing downhole tools, stimulation services, including equipment and chemicals/fluid systems, surface well testing services, wireline, and production logging services and tools, saturation monitoring, and well integrity.

CEO of ADNOC Offshore Ahmad Saqer Al-Suwaidi said: “These contracts are an important contributor to ADNOC Offshore’s plans to build our production capacity to over 2 million barrels a day in the coming years to support the ADNOC Group’s smart growth strategy.

The award follows a highly competitive bid process, which included a rigorous assessment of how much of the contract value would support the growth and diversification of the UAE’s economy through ADNOC’s In-Country Value Program.”

ADNOC Drilling’s transformation into a fully integrated drilling services provider followed the award to Baker Hughes of a 5 percent share in the company, which is now capable of delivering start-to-finish drilling and well-construction services onshore and offshore with proven efficiency gains.

As of May 2021, ADNOC Drilling has delivered over 180 IDS wells since 2018, achieving an efficiency improvement of close to 50 percent, which resulted in over $210 million (AED767 million) savings.

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World Bank Expects GCC Economic Growth to Rise to 3.2%

The Saudi capital Riyadh. AFP file photo
The Saudi capital Riyadh. AFP file photo
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World Bank Expects GCC Economic Growth to Rise to 3.2%

The Saudi capital Riyadh. AFP file photo
The Saudi capital Riyadh. AFP file photo

Gulf Cooperation Council (GCC) economies showed resilience in navigating global uncertainties while advancing economic diversification in non-oil sectors, the World Bank said on Thursday, projecting economic growth across the Council to increase in the medium-term to 3.2% in 2025 and 4.5% next year.

The World Bank's growth forecast for this year is lower than its previous forecast of 4.2% in December, while the forecast for next year has been raised from 4.2% to 4.5%.

According to the latest edition of the Gulf Economic Update (GEU), regional growth was 1.7% in 2024, an improvement from 0.3% in 2023.

In its report titled “Smart Spending, Stronger Outcomes: Fiscal Policy for a Thriving GCC,” the World Bank said that while global energy markets continue to play a significant role across the GCC, sustained diversification efforts are fostering a more balanced and resilient growth model.

“The resilience of GCC countries in navigating global uncertainties while advancing economic diversification underscores their strong commitment to long-term prosperity,” said Safaa El Tayeb El-Kogali, Division Director for the GCC countries at the World Bank.

“Strategic fiscal policies, targeted investments, and a strong focus on innovation, entrepreneurship, and job creation for youth are essential to sustaining growth and stability,” she added.

According to the report, the non-hydrocarbon sector remained resilient, expanding by 3.7%, largely fueled by private consumption, investment, and structural reforms across the GCC.

It said in 2024, GCC economies faced a contraction of the oil sector of 3.0% linked to OPEC+ production cuts, which were aimed at the stabilization of global energy prices.

Overall regional growth nonetheless strengthened to 1.8%, driven by a resilient expansion of the non-hydrocarbon sector by 3.9%.

This expansion, the Bank said, has been driven by Bahrain, Oman, Qatar, Saudi Arabia, and the UAE.

On aggregate, 50% of the non-hydrocarbon expansion can be attributed to private consumption, with the other half being driven by government consumption and fixed investment.

In Saudi Arabia, the report said Vision 2030 continues to drive diversification; the share of non-oil sectors in GDP grew from 45.4% to 54.8% since its adoption.

It added that non-oil sector growth is forecast to remain at 4.97% in the medium term.
Meanwhile, the bank said global trade uncertainty can be a risk for diversification efforts across the GCC. Its impact could materialize through the supply of externally sourced materials and the demand for exported hydrocarbons.

On the global demand side, trade uncertainty and tariffs can induce a global economic slowdown, hampering global demand for hydrocarbons, which remain among the main export goods for the GCC. Again, impacts on Chinese business and consumer dynamism could have particularly pronounced effects for the GCC due to their strong trade linkages.

At the same time, this uncertainty can also be an opportunity to accelerate structural reforms in the GCC.

In the report, the Bank said headline inflation across the GCC remains low, despite interest rate cuts in 2024.

GCC headline inflation rates averaged 2.0% in 2024, showing a further decline from an average of 2.2% in 2023.

In a change to previous years, 2024 saw interest rate cuts across the GCC countries, in line with decisions by the US Federal Reserve, given the exchange rate pegs.

Therefore, the Bank report discusses the effectiveness of fiscal policy in ensuring macroeconomic stabilization and encouraging growth.

The topic is particularly relevant as oil price fluctuations strain budget balances in several countries across the region.

Some GCC countries, the Bank said, are projected to experience increasing fiscal deficits in 2025, emphasizing the need for understanding the effectiveness of fiscal policy.

The report finds that government spending in the GCC region has effectively stabilized economies, especially during recessionary episodes.

The findings show that a 1-unit increase in fiscal spending can boost non-hydrocarbon output by 0.1-0.45 units in the region.

The report also finds a marginal impact of government investment on non-hydrocarbon output – a 0.07% change in potential output for a one-time percentage point increase in investment.

The report also showcases Oman’s fiscal consolidation journey as a noteworthy example of effective economic reform and responsible fiscal management.

It highlights the challenges Oman has faced due to oil dependency, the measures it implemented to restore fiscal balance, and the encouraging outcomes of these reforms.

Under its Medium-Term Fiscal Plan 2020-2024, Oman introduced wide-ranging reforms to diversify revenue sources, improve expenditure efficiency, and prudently managing hydrocarbon windfalls.

Oman’s reforms have yielded tangible results since 2022, with a marked improvement in its fiscal position and a significant reduction in public debt.