Abu Dhabi’s ADNOC signs agreements worth up to $1bn for project engineering services

The Abu Dhabi National Oil Company (ADNOC) has announced the signing of framework agreements for concept and front-end engineering design (FEED) services for major projects across its value chain to support the delivery of its 2030 strategy.

The framework agreements – which were signed with eight global engineering contractors – have a combined scope of up to $1bn (Dhs3.67bn) and the potential for 50 per cent of the value to flow back into the country’s economy under ADNOC’s In-Country Value (ICV) programme, over the agreement term between 2021 and 2026. The scope of the agreements is based on the forecasted requirement for external project engineering services across the ADNOC Group, a statement said.

ADNOC signed the framework agreements with AMEC International Ltd (part of the Wood Group), Fluor, McDermott, Mott MacDonald, SNC-Lavalin International Arabia Limited – Abu Dhabi (part of the Kentech Group), Technip Energies, Worley, and a joint venture between Tecnicas Reunidas and NPCC.

We have secured framework agreements worth almost $1bn with eight top-tier engineering contractors for project engineering services across our value chain.

The agreements could see up to 50% of the value flow back into the UAE economy under our In-Country Value program.

— ADNOC Group (@AdnocGroup) August 23, 2021

The agreements will run for five years, with an option for a two-year extension. The eight contractors have committed to set up and run enhanced training programmes to further develop local expertise and enable knowledge transfer.

By structuring the framework agreements with a group of contractors, ADNOC secured pre-agreed terms and conditions thereby reducing tendering cycle by months, and achieved competitive rates by leveraging long-term contracts that service its entire portfolio. It also established a group-wide performance management and review process that provides contractor performance visibility, the statement added.

The smart agreements will deliver cost savings, optimise project delivery schedules and provide ADNOC with increased flexibility, while returning up to 50 per cent of the value back into the UAE economy under ADNOC’s In-Country Value programme.

— مكتب أبوظبي الإعلامي (@admediaoffice) August 23, 2021

Abdulmunim Saif Al Kindy, ADNOC people, technology and corporate support executive director, said: “We are very pleased to engage with the eight top-tier engineering contractors awarded to provide best-in-class engineering expertise on our strategic projects across our full value chain.

“These framework agreements follow a very competitive tender process and the smart nature of the deals will deliver substantial cost savings, optimise project delivery schedules and provide ADNOC with increased flexibility to drive its growth targets and proactively respond to the demands of the fast-evolving energy landscape. In addition, the agreements offer the potential to create additional skilled employment opportunities for Emiratis and include commitments that contracted services will primarily be carried out in the UAE, ensuring more economic value remains in the country from our contract awards.”