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ADNOC enhances drilling efficiencies with $2 billion in cost savings

Nov 16, 2020
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The Abu Dhabi National Oil Company (ADNOC) said it has achieved cost savings of $2 billion (AED7.36 billion) over the past five years by leveraging advanced technologies and digitalisation to enhance drilling efficiencies and optimise operations.

In addition to advanced technologies, ADNOC unlocked the cost savings and efficiency gains by harnessing fully integrated drilling services (IDS) and innovative techniques to improve drilling performance and well economics through several initiatives.

The achievement is a testament to ADNOC’s ongoing strategic investments in digitisation and state of- the-art technologies to further enhance performance, maximise value and enable smart growth as part of its digital transformation. It also highlights ADNOC’s focus on driving down costs to reinforce its resilience and agility as it flexibly responds to market dynamics.

A key enabler of the $2 billion cost savings is ADNOC’s Real Time Data Monitoring Center (RTMC) which monitors up to 120 well sites simultaneously in real-time and is powered by Big Data from live and historical operations. The RTMC collects information to track drilling performance and well delivery progress, enabling ADNOC to optimize drilling operations by reducing non-productive time and enhancing productivity.

By the end of 2019, the RTMC had facilitated a reduction in well duration by 30 per cent, providing cost savings of about $1 billion (AED3.68 billion). The savings underscore how ADNOC is delivering on its objectives of creating a more profitable upstream business and strengthening its position as a global leading low-cost producer of crude oil, as part of its 2030 strategy.

Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, said: “The cost savings ADNOC unlocked highlight how we are accelerating the use of advanced technologies, digitalisation and innovative drilling techniques to drive performance and reinforce our position as a leading provider of comprehensive drilling and well construction services while supporting our strategic objectives of creating a more profitable upstream business and maximizing value for the UAE. The achievement validates ADNOC’s focus on embedding state-of-the-art technologies across our value chain and is a testament to our commitment to optimise our operations and enhance efficiency throughout our business as we further strengthen our position as one of the lowest-cost producers of crude oil in the world.”

Techniques and initiatives implemented by ADNOC to increase drilling efficiency and enable the cumulative savings of $2 billion include adopting light or linerless casing design, using smart drilling fluids and maximising offline jobs through batch drilling, improved data acquisition and stimulation jobs performed offline.

Abdulrahman Abdullah Al Seiari, CEO of ADNOC Drilling, said: “The fact we have enabled substantial cost savings for ADNOC underpins our relentless drive to enhance our capabilities and competitiveness. As a critical link in ADNOC’s upstream value chain, providing fully integrated drilling and associated services, we are reinforcing our performance to better support the delivery of ADNOC’s 2030 strategy. As part of this effort, we strengthened our rig fleet and expanded our service offering as well as accelerated our adoption of technology which is enabling us to drill more wells in less time. This is supporting ADNOC to unlock greater value from its conventional and unconventional hydrocarbon resources as we reinforce our competitiveness in any market scenario.”

ADNOC Drilling has also delivered over 100 integrated drilling services (IDS) wells since 2018, achieving an efficiency improvement of more than 35 per cent, which resulted in over $170 million in savings. This achievement followed the award to Baker Hughes of a five percent share in ADNOC Drilling, transforming the company into a fully integrated drilling business that is capable of delivering start-to-finish drilling and well-construction services. ADNOC’s expanded service offering also includes unconventional methods of extraction.

This announcement was made at the 16th annual Rig Owners Seminar, which took place virtually. The event is organised by ADNOC Drilling, a subsidiary of ADNOC, in cooperation with DNV GL and held on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC).