The Abu Dhabi National Oil Company (ADNOC) announced, it has successfully implemented an innovative initiative to drive efficiencies in its tendering process. This program supports ADNOC’s ongoing efforts to enhance its approach to procurement and maximize value for ADNOC and its community of suppliers and service providers.
The program standardises the terms and conditions for the procurement of drilling and oilfield goods and services across ADNOC’s entire value chain. As a result, all of ADNOC’s pre-qualified bidders are now subject to the same terms and conditions in competitive tendering, reducing the timeline for legal negotiations from months to weeks.
To deliver this first of its kind strategic initiative, ADNOC’s Legal Function, supported by its Upstream and Commercial & In-Country Value Directorates, developed global and oil and gas industry standard best practice terms and conditions for drilling and oilfield goods and services to support procurement of ADNOC’s entire value chain, sought feedback on commercial, risk and operational requirements from ADNOC’s pre-qualified community of goods and services providers and negotiated ADNOC’s standardized terms with the entire market.
Jasim M. Saeed, Senior Vice President, Group Procurement at ADNOC, said: “This initiative significantly speeds up ADNOC’s tendering process. The approach underscores our efforts to drive commerciality across our business and proactively respond to the demands of a fast-evolving energy landscape. We are very pleased to have completed this initiative in a timely manner and we continue to work on identifying more win-win solutions for us and our contractors and suppliers to enhance value as we deliver our 2030 strategy.”
The program strategically positions ADNOC as a global industry leader for best-in-class oilfield procurement. It also strengthens ADNOC’s relationships with its suppliers and contributes to more efficient operations, which ultimately maximizes the value from every barrel it produces.
Over 1,100 international principal companies and United Arab Emirates (UAE) agent companies have signed up to the program. The initiative was negotiated by ADNOC’s Legal Function outside of the tender cycle and completed in only two months, ensuring there was no impact on ADNOC’s operations. Some of ADNOC’s largest providers of oilfield goods and services, including Baker Hughes, Halliburton, Schlumberger, and Weatherford, have signed up to the program.
Commenting on the program, Samir Al Gharbi, General Manager of Gulf Automation Services & Oilfield Supplies, said: “This initiative is yet another remarkable reminder that ADNOC continuously evolves and adapts its business vision and strategies to increase efficiency and boost productivity and also provide a win-win solution for its suppliers. Standardizing the procurement terms and conditions across ADNOC’s value chain has drastically reduced the tendering cycle from months to just weeks. We believe that applying the same terms and conditions for all prequalified bidders is a very helpful and practical tendering methodology.”
Atif Arikat, Managing Director of Al Ghaith Oilfield Supplies & Services Co. Ltd., said: “It was our pleasure to have had the opportunity to participate in the excellent initiative of ADNOC to standardize the procurement terms and conditions which had a positive impact on the ADNOC’s tendering process. This initiative further strengthened the relationship between ADNOC and its business partners due to the dialogue and discussions that took place to streamline the procurement terms and conditions which resulted in shortening the tendering process by avoiding clarifications and deviations on the terms and conditions.”
Kamel Jammeli, Vice President of Sales at Al Mansoori Specialized Engineering, said: “We, along with our group companies and principals, would like to congratulate ADNOC for the successful implementation of this initiative. Standardizing the terms and conditions reduces the tender cycle period, wherein all the contractual terms and conditions are aligned and will require minimal involvement of legal advice during the actual tendering phase. Our entities in the UAE and principals abroad will be able to better concentrate on commercial matters and scope of services rather than legal aspects. This approach initiated by ADNOC is advanced and unique.”
Regina Jones, Chief Legal Officer at Baker Hughes, said: “We were pleased to participate in this process to standardize the procurement terms and conditions and we look forward to continuing to supply ADNOC with technologies and services that take energy forward, making it safer, cleaner and more efficient for people and the planet.”
Hans Klampferer, Vice President, Middle East & North Africa at Weatherford, said: “Weatherford was pleased to be offered the opportunity to review and provide feedback and suggestions on ADNOC’s terms and conditions across its numerous transaction-specific templates. With the successful completion of this initiative, the contracting process with ADNOC has been greatly simplified and made more efficient and transparent.”
Hichem Bouhlel, Managing Director at Schlumberger, said: “We are very pleased to have had such great engagement with ADNOC on this initiative and thank them for their open and progressive discussions throughout this well-structured process. We believe the resulting alignment around a set of optimized contractual terms and conditions will further enhance our strategic partnership and result in an efficient and sustainable contracting process allowing Schlumberger to focus on delivering the best solutions to ADNOC.”
ADNOC plans to expand the initiative to include process technology licensing agreements and construction agreements as it builds on the success of this first phase.