UAE to work with Russia on plans for clean energy
▶ Boost in capacity with billions worth of contracts awarded to local and international equipment companies
The UAE and Russia will share expertise to boost the production of clean energy.
They signed a declaration of intent to collaborate in developing the hydrogen sector during a joint meeting at the Abu Dhabi International Petroleum Exhibition Conference yesterday.
“Similar partnerships could help to implement the plans for transitioning into clean energy and assist both countries in drafting projects and initiatives that support the Paris climate change agreement,” said Sharif Al Olama, undersecretary for energy and petroleum affairs in the Ministry of Energy and Infrastructure.
Major oil producing countries are expected to increase their investments in clean energy in their efforts to achieve net zero emissions by the middle of the century.
The UAE has pledged to invest Dh600 billion in clean energy over the next three decades.
It has the world’s cheapest solar power and is home to three of the largest solar complexes in the world. It is also the first Arab country to develop a peaceful nuclear energy programme.
The Emirates plans to become a leading player in the hydrogen fuel industry. It revealed a programme called the UAE Hydrogen Leadership Roadmap at the Cop26 climate summit.
Under the latest deal, the UAE and Russia will develop artificial intelligence and digital services, exchange expertise and share best practice in the clean energy sector.
The agreement “represents the strength of bilateral economic relations between the two countries”, said Pavel Sorokin, Russia’s deputy energy minister.
Russia expects to intensify co-operation with the UAE at all levels, he said.
The two countries enjoy strong trade and investment ties.
Non-oil bilateral trade grew 8 per cent annually to $3.7bn in 2019, Sheikh Abdullah bin Zayed, Minister of Foreign Affairs and International Co-operation, said earlier this year.
Adnoc is investing $6 billion to enable drilling growth as it boosts its crude oil production capacity to 5 million barrels per day by 2030.
The investment is in the form of procurement awards to top-tier contractors for wellheads and related components, downhole completion equipment and related services, and liner hangers and cementing accessories, which are crucial in drilling for oil and gas and completing wells, Adnoc said yesterday.
“Adnoc’s world-record investment in drilling-related equipment underlines our commitment to responsibly unlocking our world-scale hydrocarbon resources and expanding our production capacity to continue providing the world with some of the least carbon-intensive barrels for decades to come,” said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc managing director and group chief executive.
The contracts were awarded to local and international companies. Gulf Automation Services & Oilfield Supplies, UAE agents for TechnipFMC, and Al Ghaith Oilfield Supplies & Services Company, UAE agents for Baker Hughes, secured $3.27bn worth of contracts related to the procurement of wellheads and related components for drilling operations.
Schlumberger Middle East and Weatherford bin Hamoodah company won another contract for downhole completion equipment and related services. The value of the deal is $2.34bn and the award runs for five years, with an option to extend for an additional two years.
“The scope of the awards cut across the Adnoc group and will provide Adnoc with a robust supply chain of drilling-related equipment to enable its requirement to drill thousands of new wells as it expands its production capacity while maintaining its leading lowcost oil producer status,” the company said.
About 60 per cent of the total value of the awards could flow back into the UAE economy under Adnoc’s In-Country Value programme.
Adnoc also said more than $900 million worth of wellheads, and more than $700m worth of downhole completion equipment will be manufactured in the UAE, in addition to all liner hangers.
Furthermore, $185m in foreign direct investment will flow into the UAE’s economy to establish two wellheads manufacturing and assembly complexes, enhance drilling-related equipment manufacturing and assembly, as well as enable the local manufacturing of 20 new drilling completion products.
The procurement award for liner hangers and cementing accessories is worth up to $337m and runs for five years, with an option to extend for two years.
The award for liner hangers was made to Weatherford bin Hamoodah Company and Uni-Arab Engineering & Oilfield Service, the UAE agents of Weatherford and Baker Hughes, respectively.
The award for cementing accessories was made to Al Ghaith Oilfield Supplies & Services, Best Pick General Trading and Al Mansoori Specialised Engineering, UAE agents for Downhole Products, NeOz Energy and Sledgehammer, respectively.
“The awards will directly create more skilled employment opportunities for UAE nationals, enhance domestic manufacturing and further stimulate the growth of the private sector and our local industrial base,” Dr Al Jaber said.
“This is yet another example of how Adnoc is working to support the growth and diversification of the UAE’s economy, in line with the Principles of the 50 and the leadership’s wise directives.”