ADNOC Drilling acquires 70% stake in rigs JV with SLB for $112m

MUSCAT: ADNOC Drilling has agreed to purchase a 70% share in SLB’s onshore drilling operations in Oman and Kuwait, establishing a joint venture valued at up to $112 million. This strategic move, anticipated to conclude in the first quarter of 2026, will grant ADNOC Drilling access to eight operational onshore rigs—six located in Oman and two in Kuwait.

This acquisition represents ADNOC Drilling’s first significant drilling operation outside the United Arab Emirates, aside from a single rig in Jordan. The company aims to double its rig count within a year through further acquisitions and tenders, according to Chief Financial Officer Youssef Salem.

The transaction entails an initial payment of $91 million, with an additional $21 million contingent upon performance metrics. ADNOC Drilling plans to finance the deal using a $1 billion revolving loan facility, which it intends to refinance before its maturity later in 2025.

Salem noted that the current macroeconomic environment, characterised by pressure on valuations and multiples globally, reduces the pool of potential buyers for such assets. This scenario presents a competitive advantage for cash buyers like ADNOC Drilling.

The company is also exploring potential market expansion beyond Oman and Kuwait, focusing on growing its scale through acquisitions and tenders.

Source: Reuters

Date: 31 May 2025