Adnoc signs US$1 billion framework agreements for project engineering services
UAE state-owned oil/gas firm Abu Dhabi National Oil Company has signed framework agreements for Concept and Front-End Engineering Design (FEED) services for major projects across its full value chain to support the delivery of its 2030 strategy.
The framework agreements – which were signed with eight top-tier global engineering contractors – have a combined scope worth up to US$1 billion (AED 3.67 billion) and the potential for 50% of the value to flow back into the United Arab Emirates’ (UAE) economy under Adnoc’s In-Country Value (ICV) program, 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.
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The nature of the agreements underpins Adnoc’s smart approach to procurement which is enabling it to drive value and commerciality across its portfolio. By structuring the framework agreements with a group of top-tier contractors instead of procuring smaller individual agreements, Adnoc was able to secure pre-agreed terms and conditions thereby reducing tendering cycle by months, achieve highly competitive rates by leveraging long-term contracts that service its entire portfolio, and establish a group-wide performance management and review process that provides high visibility of contractor performance.
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. 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 programs to further develop local expertise and enable knowledge transfer.
As an integral part of its 2030 strategy, Adnoc says it is optimising its procurement strategy to reflect market dynamics, focusing on long-term contracts with a reduced number of suppliers that provide stable and reliable delivery at highly competitive rates.
Abdulmunim Saif Al Kindy, Adnoc People, Technology & 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, optimize 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.”
