Abu Dhabi announces nearly $1 billion drilling contract

The Abu Dhabi National Oil Company (ADNOC) has awarded a major drilling contract to its subsidiary.

ADNOC Drilling will receive $980 million to obtain two offshore rigs and the accompanying equipment and manpower. ADNOC said the new rigs will work to find oil and gas off the coast of the United Arab Emirates, saying the contract will help to “maximize value from Abu Dhabi’s offshore oil and gas resources,” according to a statement. 

Why it matters: The UAE is rich in oil and gas, especially Abu Dhabi. This has made the Gulf state relevant in global energy politics. Last month, ADNOC made an agreement with a German company to supply them with liquified natural gas. Germany, like other European states, is seeking to reduce its dependence on Russian gas in response to the invasion of Ukraine and ahead of the European winter.  

Emirati entities have been investing heavily in green technology and renewable energy this year, but oil and gas remain responsible for about a third of the UAE economy. 

ADNOC announced a major new gas discovery off the coast of Abu Dhabi in July. In May, they announced three new oil discoveries. 

Know more: Oil prices have risen considerably this year and could soon go even higher. Last week, OPEC — of which the UAE is a member — and Russia announced a major production cut for November. The Biden administration publicly criticized Saudi Arabia — OPEC’s biggest producer — over the decision.