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ADNOC Drilling first-quarter profits jump on the strength of oilfield services

ADNOC Drilling is the subsidiary of Abu Dhabi’s state oil company. It reported on Thursday a 24 percent increase in profit for its first quarter, driven by a strong growth in oilfield services.

ADNOC Drilling increased its net profit to $341 millions in the March quarter, up from $275 in the same period of last year. The revenue rose by almost a third, to $1.17 Billion.

Oilfield Services' revenue increased by 134%, to $342 Million. This was mainly due to an increase in activity for unconventional and integrated drilling.

The board of directors also approved quarterly dividends instead of semiannually. The first payment, $217 million for 2025's first quarter, is expected to be made on May 28. This amount will serve as a minimum for all subsequent quarterly payments made in 2025.

ADNOC Drilling stated that despite recent volatility on the global markets, its previously announced guidance for 2025 and the medium-term remains unchanged. Recent contract awards also support this.

The company expects a net profit of between $1.35 billion and $1.45 trillion in 2025, and revenues of $4.6 to $4.8 billion. ADNOC Offshore has recently won a contract worth $1.63 billion for five years of integrated drilling services and a contract worth $806 million for three island rigs.

ADNOC Drilling’s joint ventures Enersol & Turnwell are driving its growth. Turnwell was founded to access unconventional energy resources, such as oil and gas, which require advanced extraction techniques.

Enersol is a joint venture between Alpha Dhabi and Abu Dhabi that invests in drilling powered by artificial intelligence.

Youssef Salm, the Chief Financial Officer, said that it is expected to spend $700 million this year on at least two acquisitions and mergers, with a focus on the United States. Alpha Dhabi will contribute about half of the $700 million, as it is part of an Abu Dhabi business empire headed by Sheikh Tahnoon Bin Zayed Al-Nahyan.

Salem stated that ADNOC Drilling expects to spend around $500 million on capital expenditures this year, and another $500 million for mergers and purchases, $350 of which would be for Enersol.

Out of a total of 144 wells, the company has already drilled over 40 unconventional ones. The CFO stated that it expects to drill more than 80 wells by the end the year. The company also drills about 800 conventional wells per year. (Reporting and editing by Emelia Sithole Matarise; Yousef SABA)

(source: Reuters)