Argus Media Limited

09/08/2021 | News release | Distributed by Public on 09/08/2021 06:42

Helmerich & Payne to invest $100mn in Adnoc Drilling

US rig owner and designer Helmerich & Payne (H&P) has agreed to become a long-term shareholder in the drilling subsidiary of Abu Dhabi's state-owned oil firm Adnoc as part of a strategic alliance designed to support the emirate's crude capacity growth target.

Adnoc Drilling will acquire eight new onshore rigs from H&P for $86.5mn as part of the deal. H&P will then make a $100mn cornerstone investment in the upcoming listing of Adnoc Drilling on Abu Dhabi's stock exchange. Adnoc says the strategic partnership and the rig acquisition will not only support its goal to boost crude production capacity to 5mn b/d by 2030 from just over 4mn b/d now, but it will also help the UAE reach its 2030 gas self-sufficiency target and support Abu Dhabi in unlocking its unconventional oil and gas resources.

Earlier this week, Adnoc announced plans to float a 7.5pc share in Adnoc Drilling on 3 October. The initial public offering (IPO) is part of the emirate's strategy to further monetise its assets and attract new investors to help fund its expansion and energy transition plans.

Once the $100mn share acquisition is complete, H&P will join US oil service company Baker Hughes as a major shareholder. Baker Hughes acquired a 5pc stake for $550mn in 2018, valuing Adnoc Drilling at around $11bn.

The agreement with H&P 'will provide Adnoc Drilling with access to new world-class rigs and services, enabling it to continue to support Adnoc in our ambitious production capacity expansion plans', chief executive Sultan Ahmed al-Jaber said. The deal will also help bolster maintenance efficiencies, supplement supply chain capabilities, add engineering and rig design competencies, as well as improve well completion times and economics, Adnoc said.

Adnoc Drilling already has one of the biggest rig fleets in the Middle East. It operates 107 rigs and provides exclusive rig hire and other services for Adnoc. For H&P, the alliance with Adnoc represents a rare foray out of the US, which accounts for 242 of its 281-strong rig fleet. It has another 32 land rigs operating overseas - 20 in Argentina, seven in Colombia, three in Bahrain and two in the UAE. Its remaining seven rigs are offshore facilities.

By Adal Mirza