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ADNOC Awards $2Bln in Contracts for the Hail, Ghasha Gas Development Project

The Hail and Ghasha gas fields are located approximately 190 km northwest of the capital, Abu Dhabi. (WAM)
The Hail and Ghasha gas fields are located approximately 190 km northwest of the capital, Abu Dhabi. (WAM)
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ADNOC Awards $2Bln in Contracts for the Hail, Ghasha Gas Development Project

The Hail and Ghasha gas fields are located approximately 190 km northwest of the capital, Abu Dhabi. (WAM)
The Hail and Ghasha gas fields are located approximately 190 km northwest of the capital, Abu Dhabi. (WAM)

Abu Dhabi National Oil Company (ADNOC) announced Wednesday awarding two substantial contracts totaling AED7.49 billion ($2 billion) to ADNOC Drilling for the Hail and Ghasha Development Project.

The contracts comprise AED4.89 billion ($1.3 billion) for integrated drilling services and fluids, and AED2.6 billion ($711 million) for the provision of four Island Drilling Units.

A third contract, valued at AED2.5 billion ($681 million), was also awarded to ADNOC Logistics and Services for the provision of offshore logistics and marine support services.

More than 80% of the value of the awards will flow back into the UAE’s economy under ADNOC’s successful In-Country Value (ICV) program, the company announced, adding that all three of the contracts will cover the Hail and Ghasha drilling campaign for a maximum of 10 years.

The project is part of the Ghasha Concession, which is the world’s largest offshore sour gas development and a key component of ADNOC’s integrated gas masterplan, as well as an important enabler of gas self-sufficiency for the United Arab Emirates.

Dr. Sultan Ahmed al-Jaber, Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC, said the company is committed to unlocking the UAE’s abundant natural gas reserves to enable domestic gas self-sufficiency, industrial growth and diversification, as well as to meet growing global gas demand.

Abu Dhabi’s vast gas resources can play an increasingly important role in providing lower-carbon energy to meet the current and future demands, while the world still relies on hydrocarbons, Jaber added.

“As we responsibly execute this development we continue to explore ways to accelerate project delivery and further reduce emissions, together with our strategic international partners.”

ADNOC’s gas masterplan links every part of the gas value chain to ensure a sustainable and economic supply of natural gas to meet the growing requirements of the UAE and international markets, through expansion of ADNOC’s liquefied natural gas (LNG) capacity.

The plan includes applying new approaches and technologies to enable increased and competitive gas recovery from existing fields, as well as developing untapped resources and leveraging innovation to continually drive emissions reduction.

Production from the Ghasha Concession is expected to start around 2025, ramping up to produce more than 1.5 billion standard cubic feet per day of natural gas before the end of 2030.

Four artificial islands have already been completed and development drilling is underway.

In November 2021, ADNOC and its partners awarded two Engineering, Procurement & Construction (EPC) contracts for the Dalma Gas Development Project, within the Ghasha Concession.

They also awarded a contract to update the Front-End Engineering and Design (FEED) for the Hail and Ghasha project.

The updated design is expected to be completed by the end of the year.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."