Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
ADNOC Drilling is set to accelerate its international expansion after acquiring a majority stake in SLB’s rigs in Kuwait and Oman, with plans for further acquisitions worldwide through its technology and AI platform, Enersol.
“We are looking for opportunities through Enersol, our technology and AI platform. We have already completed four acquisitions, which together operate in 40 different countries,” ADNOC Drilling’s Chief Financial Officer (CFO), Youssef Salem, told Bloomberg in a recent video interview.
“We will continue to do another $750 million of investments from the Enersol vehicle across the globe.”
The recent $112 million agreement to acquire a 70% stake in SLB’s land drilling rigs business in Kuwait and Oman is, according to Salem, “a natural next step” in ADNOC Drilling’s growth journey.
“We started with this transaction with SLB, who have been operating in Oman for over 55 years and in Kuwait for many years as well. We look to unlock the national targets of Kuwait, going to 4 million barrels per day, similarly contribute to Oman’s growth ambitions and take our integrated technology offering beyond the UAE,” he said.
Salem said ADNOC Drilling’s scale and performance give it a strong platform for expansion: “Our fleet has reached the largest in the Middle East and North Africa, with 149 rigs. Our oil field services are still the fastest growing with more than 100% year-on-year growth. Our technology implementation has now reached 140 patents housed within Enersol. It’s really growth across the board, continuing and sustainable.”
The company has upgraded its guidance for the second half of the year, backed by long-term contracts.
“We operate with 15-year contracts that run until 2040 and beyond. We won around $5 billion of new contracts in the first half, which completely de-risks our guidance and growth. That’s why we’re very comfortable committing to this upgraded guidance,” Salem said.
“We’re also the only company in the UAE that pays a progressive quarterly dividend that’s committed for at least five years.”
The Board of Directors has approved a second quarterly dividend for 2025 of $217 million — around 5 fils per share. Two quarterly dividends have been announced so far this year, with a third expected later in 2025.
Salem underlined ADNOC Drilling’s role as the sole provider of drilling and associated services to ADNOC, benefiting from the UAE’s competitive position in global energy markets.
“The UAE has the lowest cost per barrel and the lowest emissions per barrel globally. ADNOC is pushing ahead with its plans to reach 5 million barrels per day of oil by 2027 and significantly increase gas output, and we are the exclusive enabler of these national targets,” Salem said in the Bloomberg interview given just after the declaration of financial results of the first half of 2025.
With free cash flow of $408 million in Q2 2025 compared to $282 million a year earlier, ADNOC Drilling has the resources to pursue further acquisitions.
“Our top priority is to continue to increase distributions. We have the most attractive progressive dividend policy in the Middle East, with full board discretion to upsize dividends even above the floor. Secondly, we’ll continue to grow both organically and inorganically,” Salem said.
Artificial intelligence is already delivering measurable results: “It’s fundamentally adding because it’s unlocking new revenues for us. We’re building six new AI-enabled rigs that will contribute $1.4 billion of revenues over 10 years. It’s also improving safety — we’re installing smart cameras across all our rigs to pre-detect any potential accidents and keep our people safe.
"And it’s enhancing governance — at our board meeting a couple of days ago, MEERAi, our AI board observer, joined for the first time, improving the effectiveness of discussions and governance at both board and management level.”
Founded in 1972 as the National Drilling Company by Emiri Decree and rebranded as ADNOC Drilling in 2017, the company was listed on the stock market in 2021.
Salem believes its combination of scale, stability and innovation positions it for sustained growth. “We’re in a unique position to deliver consistent, progressive shareholder returns while expanding our footprint regionally and globally. This is sustainable growth, and we are only just getting started.”
