ADNOC unit to buy rigs for $86.5 mil amid plans to lift oil output capacity by 2030

Abu Dhabi National Oil Co.'s drilling unit plans to buy eight rigs for $86.5 million amid plans by the parent company to boost its oil output capacity to 5 million b/d by 2030 from about 4 million b/d now.

ADNOC Drilling, which currently has 96 rigs, will acquire the rigs from Helmerich & Payne, ADNOC said in a Sept. 8 statement. After the transaction, Helmerich & Payne will invest $100 million in ADNOC Drilling's upcoming initial public offering.

ADNOC plans to sell 7.5% in ADNOC Drilling in an initial public offering and list the shares on the Abu Dhabi Securities Exchange in October. Baker Hughes owns 5% of ADNOC Drilling, a transaction that valued the company at around $11 billion at the time of the purchase in 2018.

"The strategic alliance and rig acquisition will support ADNOC's target of reaching 5 million barrels per day (mbpd) production capacity and gas self-sufficiency for the UAE by 2030, along with plans to unlock its unconventional oil and gas resources," the statement said.

ADNOC is spending $122 billion between 2021-2025 on strategic projects, including the oil capacity ramp-up.

ADNOC Drilling's IPO will be the parent company's second share sale after fuel retailer ADNOC Distribution, which is listed on the Abu Dhabi exchange. In 2017, ADNOC raised $851 million from selling a 10% stake in ADNOC Distribution.