ADNOC Drilling sharpens manufacturing pivot

ADNOC Drilling is targeting an equal revenue split between its core drilling business and manufacturing-linked oilfield services within five years, signalling a deeper push into local industrial capacity as Abu Dhabi’s energy sector widens its role beyond upstream operations.

Youssef Salem, Chief Financial Officer of ADNOC Drilling, said the company aims to generate about 50 per cent of revenue from drilling and 50 per cent from manufacturing and related value-added services over the next five years. The plan marks a significant shift for a company historically anchored in rig operations and long-term drilling contracts, and comes as the UAE uses large energy procurement programmes to expand domestic manufacturing, reduce import dependence and build industrial resilience.

Speaking on the sidelines of the Make it in the Emirates 2026 platform, Salem said ADNOC Drilling had signed three agreements with local and international partners, including ADNOC Refining and global companies, to broaden the manufacturing of oil equipment inside the UAE. The company is seeking to localise production of key equipment such as drilling tools and measurement services, with the aim of serving domestic projects while building export capability for international markets.

The move reflects a wider transformation across ADNOC’s operating companies, where procurement visibility, long-term project awards and industrial partnerships are being used to create a larger domestic supply chain. ADNOC has outlined plans to award about Dh200 billion, or $55 billion, in projects between 2026 and 2028, covering upstream and downstream operations. The scale of that pipeline gives manufacturers clearer demand signals and supports investment in equipment, skills and technology.

ADNOC Drilling’s shift is also supported by its own financial momentum. The company reported 2025 revenue of $4.9 billion, up 22 per cent year on year, with net profit of $1.45 billion and EBITDA of $2.2 billion. Oilfield services revenue rose sharply to $1.46 billion in 2025, reflecting higher integrated drilling activity, unconventional operations and additional service lines. The company has guided for revenue of about $5 billion in 2026, with net profit projected between $1.45 billion and $1.5 billion.

Salem said ADNOC Drilling currently generates about $5 billion in annual revenue, including roughly $3.5 billion from drilling activities. Oilfield services and manufacturing contribute around $1.5 billion, or nearly 30 per cent of total revenue. Raising that share to half of revenue would require continued expansion in value-added services, technology-enabled drilling, equipment manufacturing and cross-border operations.

The company’s diversification strategy is closely tied to efficiency and supply security. Local manufacturing can reduce costs, shorten procurement cycles, improve operational reliability and protect critical projects from global supply chain disruptions. For the energy sector, where rig availability, specialised tools and measurement systems can determine project timelines, the ability to source more equipment locally is becoming a strategic advantage.

ADNOC Drilling’s expansion beyond the UAE is adding another layer to the plan. The company operates about 30 rigs in regional markets out of a total fleet of around 170 rigs. It completed two strategic acquisitions abroad, including stakes in Oman and Kuwait operations and an 80 per cent stake in MB Petroleum Services, a regional drilling and oilfield services business with operations in Oman, Kuwait, Saudi Arabia and Bahrain. The MB Petroleum Services transaction added more than 20 drilling and workover rigs and production service units to its portfolio.

Those acquisitions support ADNOC Drilling’s ambition to become a broader regional energy services platform rather than a domestic drilling contractor. The company has said its model is built on long-term contracts, high fleet utilisation, automation and artificial intelligence-enabled performance systems. Its integrated drilling services business has also benefited from unconventional energy programmes, including work linked to tight reservoirs and advanced well delivery.

Growth in manufacturing and services is expected to complement, rather than replace, drilling. ADNOC’s production capacity plans continue to require additional rigs, with six new rigs expected to be added inside the UAE and four outside the country over the next two years. That expansion gives ADNOC Drilling a larger operational base while allowing the company to attach more services, technology and equipment supply to each well programme.