Adnoc Drilling, the biggest drilling company by rig count in the Middle East, reported its strongest first-quarter performance on record as the UAE's departure from Opec and a boost in domestic production drive fresh demand across both onshore and offshore drilling.
The Abu Dhabi-listed company's order book is expanding across major projects in the emirate's oil and gas sector, with no pause in activity seen across the wider Gulf region despite the Iran war, chief financial officer Youssef Salem told The National in an interview.
"We now have 30 rigs outside the UAE, predominantly in Kuwait and Oman and a small exposure in Bahrain. And what we're seeing is all of these rigs are operating," he said.
"In Kuwait specifically, where they're ramping up to four million barrels per day by 2035, we're seeing the tenders that are coming out and opportunities fully progressing. We're not seeing any pauses or delays."
On Monday, Adnoc Drilling reported $344.8 million in net profit attributable to shareholders for the first quarter. It rose by more than 1 per cent over the three months, the company said in a filing with the Abu Dhabi Securities Exchange, where its shares are traded.
The rise in profit was supported by a decrease in interest costs due to faster collections and successful refinancing completed in October, the company said.
Revenue grew by nearly 5 per cent annually to more than $1.2 billion, “driven by increased activity across the oilfield services and offshore segments, partially offset by the impact from the repurposing of certain onshore rigs”, the company added.
UAE upstream ramp-up
The UAE's plan to chart an independent production strategy, aimed at five million bpd of capacity by 2027, is directly feeding into the company's pipeline, Mr Salem said.
Major offshore projects, including the Hail sour gas development and the Upper Zakum oilfield expansion, as well as onshore growth at the Shah gasfield, are the primary sources of near-term demand, he said.
"You have big growth, both onshore and offshore," Mr Salem said. "We're very involved with that as the exclusive driller, he added.
The full impact of the onshore rigs repurposing in the first quarter was approximately $40 million in revenue, compared to $13 million in the previous quarter.
Adnoc Drilling said it experienced “no material operational or financial impact in the first quarter, continuity planning remains robust, with safety, people and asset integrity as the highest priorities”.
The company “delivered a resilient and disciplined start to 2026”, Adnoc Drilling chief executive Abdulla Al Messabi said.
“We remain focused on disciplined investment, strong cash generation and sustainable long-term returns for shareholders, while supporting Adnoc’s production capacity objectives,” he said.
For the first quarter, the board recommended a dividend of $262.5 million, expected to be paid in early June.
Regional expansion
The Abu Dhabi company has been expanding its geographical footprint and last year signed a joint venture agreement with global oilfield services company SLB for its land drilling rigs business in Kuwait and Oman.
The company also teamed up with Alpha Dhabi Holding to launch Enersol, a technology-focused venture that plans to invest $1.5 billion in technology-driven companies in the oilfield services sector.
Last week, the company also said it was buying an 80 per cent stake in Oman’s MB Petroleum Services, ahead of its mid-year schedule.
The acquired business includes 22 drilling and workover rigs, production service units, and operations across the four Gulf states. The deal is valued at $204 million.
Adnoc Drilling's rig fleet stood at 170 at the end of the first quarter, including 140 rigs in Abu Dhabi.
In the first quarter, onshore revenue reached $477 million, supported by eight land rigs in Oman and Kuwait after Adnoc Drilling acquired a 70 per cent stake in SLDC through its JV with SLB.
Meanwhile, offshore revenue stood at $345 million, with two of its new AI-enabled island rigs arriving from China in the quarter. They are expected to gradually begin operations in the second half of 2026, the company said.
Oilfield services expansion
Oilfield services activity also expanded, with revenue reaching $406 million.
Mr Salem said the expansion in oilfield services – its fastest growing segment, which registered 19 per cent year-on-year revenue growth in the first quarter, reflects a broader shift away from a focus on pure drilling.
He said the company was extending its presence across the full well life cycle, from drilling and completion to production enhancement services.
"We're not only growing in line with the overall market growth, but we're also growing the market share," he said.
The company expects to pass $5 billion in revenue this year, topping last year's record despite Iranian attacks on energy sites across the UAE, Mr Salem said previously.
