How will ADNOC’s recent $324 million worth of contracts contribute to its ICV program in the UAE?
One of the subsidiaries of the Abu Dhabi National Oil Company namely ADNOC Onshore declared its involvement with 3 contracts recently that all together is worth of AED 1,190,000,000.00 ($324 million). This initiative is now considered to be a mechanism for improving ICV in the UAE as the output of these projects is highly relevant with the factors that are considered to be determinants for In-Country Value in the UAE.
Details about the contract
|Parties chose for the contract||Value of the contract||Expected time for completion||Scope of the contract|
|Galfar Engineering & Contracting||$71,000,000.00 (AED 261,200,000.00)||5 years||Flowline construction and wellhead installation for the ADNOC Onshore in the UAE are the main responsibilities of these contractors. While Galfar Engineering & Contracting will take care of the subsidiary company’s Asab and Sahil fields, Robt Stone will look after its Bab field. They will also ensure commissioning, pre-commissioning of ADNOC’s water wells in the Emirates of Abu Dhabi.|
|Robt Stone||$168,000,000.00 (AED 618,200,000.00)||5 years|
|Galfar Engineering and Contracting||$84,000,000.00 (AED 309,100,000.00)||30 months||They will provide emergency backup in crude receiving stations of ADNOC. These stations are located at Fujairah export and Jebel Dhanna terminals. They will do so by constructing a new bypass system there.|
Contribution in the UAE’s ICV program by ADNOC
As a prominent initiator of ensuring local development in the UAE, ADNOC for the last 2 years has been taking more projects that would maximize ICV in the UAE. These 3 contracts are also expected to add significant value in the UAE’s In-Country Value. It has been estimated that ADNOC will be able to bring about more than 70% of the total value from these contracts for the UAE under its ICV program.
ADNOC Onshore’s CEO, Omar Obaid Al Nasri stated that the contracts would unleash ADNOC’s full potential in terms of capacity and efficiency in its different fields and terminals. This increased capacity will be used to optimize ADNOC’s shareholders’ value and to achieve its business strategy which is to go beyond expectation using the local resources available in the UAE.
Executive Director of ADNOC’s Upstream Directorate mentioned that the use of ADNOC’s available resources, assets and capacities in its full potential to make rationale investment and ultimately to generate worth for the economy was the main concentrating point for the contracts. This award aims at achieving ADNOC’s 2030 vision and as part of this vision, the award has been allocated to suppliers after analyzing their ICV certificated given by different ICV Certified Bodies in the UAE.
ADNOC’s ICV program in Dubai, UAE was competitive and the selection criteria were designed giving top emphasis on the capacity of potential suppliers in bringing about maximum value for ADNOC and for the UAE in the process of delivering projects. The suppliers who have the potential to add maximized In-Country Value in the UAE in terms of local employment, production, usage of local materials, supply system other and resource usage are chosen for the contracts. So, the suppliers ADNCO chose are local ones. Galfar Engineering and Contracting is a UAE based company and Robt Stone is an Abu Dhabi based company. It assures that all of the values resulted from these contacts will flow within the UAE.
By engaging Emiratis in these contracts, directly and indirectly, increasing level of exports, involving local suppliers with the projects, ADNOC is contributing to ICV in the UAE. All of these awards will ensure long term sustainability, business continuation ability and quality success for ADNOC. But how will it contribute to ICV in the UAE?
The improvement of quality means ADNOC will be able to provide more sustainable and quality-based oil supply to its customers. For the last 3 years, ADNOC itself resulted in approximately $19 billion from foreign companies in the UAE that raised ICV in the UAE by a great extent. Proper completion of these 3 projects will ensure that ADNOC will be able to retain its existing customer base and attract new ones. USA, Australia, Italy and different European countries are seemed to be repetitive customers of ADNOC. Their long-term sustainability and business continuation with these foreign customers will result in a higher level of In-Country Value for the UAE.
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