ADNOC signs $1bn worth project engineering services agreement

By Amirtha P S, Desk Reporter
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UAE state-owned oil company, Abu Dhabi National Oil Company (ADNOC) has signed framework agreements for Concept and Front-End Engineering Design (FEED) services for major projects across its full value chain as it looks to raise output capacity to 5 million barrels per day by 2030.

The framework agreements, which were signed with eight top-tier global engineering contractors, have a combined scope worth up to $1 billion and the potential for 50 percent of the value to flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program, over the contract term between 2021 and 2026. The scope of the agreements is based on the forecasted requirement for external project engineering services across the ADNOC Group.

ADNOC signed the framework agreements with AMEC International Ltd (part of the Wood Group), Fluor, McDermott, Mott MacDonald, SNC-Lavalin International Arabia Limited – Abu Dhabi (part of the Kentech Group), Technip Energies, Worley, and a joint venture between Tecnicas Reunidas and NPCC. 

The agreements will run for five years, with an option for a two-year extension. The eight contractors have committed to establish and run enhanced training programs to further develop local expertise and enable knowledge transfer.

Abdulmunim Saif Al Kindy
Abdulmunim Saif Al Kindy
Executive Director
People, Technology & Corporate Support

“These framework agreements follow a very competitive tender process and the smart nature of the deals will deliver substantial cost savings, optimize project delivery schedules and provide ADNOC with increased flexibility to drive its growth targets and proactively respond to the demands of the fast-evolving energy landscape. In addition, the agreements offer the potential to create additional skilled employment opportunities for Emiratis and include commitments that contracted services will primarily be carried out in the UAE.”

The framework agreements, with a group of top-tier contractors, has helped ADNOC to secure pre-agreed terms and conditions thereby reducing tendering cycle by months, achieve highly competitive rates by leveraging long-term contracts that service its entire portfolio, and establish a group-wide performance management and review process that provides high visibility of contractor performance.

As an integral part of its 2030 strategy, ADNOC is optimizing its procurement strategy to reflect market dynamics, focusing on long-term contracts with a reduced number of suppliers that provide stable and reliable delivery at highly competitive rates.

Related: UAE’s ADNOC invests $187mn to increase the Al Nouf oilfield’s production