In Profile: Abu Dhabi’s National Drilling Company

The UAE is targeting an oil production boost of 800 000 bpd to 3.5 million bpd by 2018, the gauntlet has been thrown down for all companies involved in exploration and production in the country’s rich onshore and offshore fields.

If the UAE’s premier oil company, Abu Dhabi National Oil Company (ADNOC) can be considered the head of the country’s oil and gas industry, its subsidiary, the National Drilling Company (NDC) is surely the beating heart of its operations.

Established in 1972 by ministerial decree, Abu Dhabi’s National Drilling Company (NDC) is considered to be one of the largest drilling contractors in the Middle East, providing drilling, work-over and well maintenance services.

NDC was ADNOC’s first venture when it set up the ADNOC Group of Companies. Today NDC operates a fleet of 18 onshore drilling rigs and 10 offshore jack-up rigs along with a multi-purpose service vessel.

Having drilled over 4000 onshore and offshore wells to a total depth of over 21 million feet since beginning operations with its ND-01 land rig back in 1973, NDC has been on a rapid expansion drive with significant contract awards over the past 24 months.

In 2009 the company awarded a contract for the manufacturing of seven new land rigs, which are under construction, delivery of which starts this year.

In the third quarter of last year NDC also awarded a contract to Sharjah-based rig building specialist Lamprell to build two new offshore jack-up rigs each valued at $158.5 million with additional optional equipment orders valued at US$ 12.6 million per rig.

The rigs will be completely outfitted and equipped, LeTourneau designed, self-elevating mobile offshore drilling platforms of a Super 116E (Enhanced) class design with a rated drilling depth of 30 000 feet.

Construction work on the rigs is underway with delivery of the first rig scheduled for the second quarter of next year.

NDC also has options for Lamprell to build two further jack-up rigs, valued at $158.5 million per rig.

NDC has issued further tenders for the construction of additional rigs required by its other clients as well as for the upgrading of some of its existing rigs to meet the drilling requirements of operating companies such as Abu Dhabi Company for Onshore Operations (ADCO), Abu Dhabi Marine Operating Company (ADMA-OPCO), and the Zakum Development Company (ZADCO).

The Union jack up

As part of its programme to fully renovate old rigs and extend their lifespan called RIAP or the Rig Integrity Assurance Programme, NDC recently received its refurbished offshore jack-up rig, Al-Ittihad from Dubai-based global ship building and repair company Drydocks World.

NDC aims to achieve 98% rig reliability and 95% availability and asset integrity at all times across its entire fleet.

The rig, whose name translates as The Union was NDC’s very first offshore rig, which it acquired in 1975. Reconditioning of the rig took 40 days at an estimated cost of $20 million.

The overhauled rig will be used by ADNOC’s offshore Zakum field exploration and production arm ZADCO at its 168 square kilometre Umm Al-Dalakh field located 25 kilometres northwest of Abu Dhabi.

The field, where oil was first discovered in 1969 began oil production some 17 years later in 1985. Al-Ittihad is capable of carrying out drilling operations in waters 150 feet deep and can drill up to 20 000 feet.

The Umm Al-Dalakh central complex is connected with the central complex of the Upper Zakum field through a 66 kilometre pipeline. The giant Upper Zakum which is estimated to hold some 16 billion barrels of reserves is where ZADCO is developing its artificial islands as part of its UZ750 programme with joint stakeholders ExxonMobil and Japan’s JODCO.

The UZ750 project is aimed at boosting the field’s current production of 550 000 bpd to 750 000 bpd by 2015.

NDC’s expertise in directional and horizontal drilling allows it to enhance its drilling service offering to deal with challenging reservoir formations that contain low-permeability rock such as those found in the Upper Zakum field.

NDC’s chief executive officer, Abdullah Saeed Al Suwaidi tells Oil & Gas Middle East the company is currently putting its investment programme into overdrive.

“Capital investment in asset renewal during the 2000-2009 periods was in the region of several hundred million US
dollars,” he says.

“Our commitment to asset integrity ensures that NDC rigs will surpass industry standards, strategically strengthening the company for decades to come and continue providing excellent services in the long run.

The RIAP programme also includes rig upgrades such as increased deck load, crane and accommodation upgrades, increased drilling capability and improved safety and environmental protection.”

The cost of drilling rigs varies by their capability, and the market availability, says Al Suwaidi.

“For example offshore rigs these days range from $160 million to $200 million while onshore rigs may cost between $25 million to $35 million,” he explains. Over the coming four years the company has plans to invest $1.3 billion in buying new onshore and offshore assets.

Challenges

The CEO explains that with the current activity NDC is experiencing, some of the key challenges for the company include the induction and operation of new rigs and the upgrade of its existing fleet.

Al Suwaidi adds that recruitment to operate the new rigs is equally challenging, particularly in providing support functions, including training and development of new recruits.

“NDC also prides itself on its industry-beating HSE standards,” says Al Suwaidi, which he adds, can have a knock-on effect on the timescale for completing infrastructure projects. The safeguarding of NDC assets and maintaining integrity remains a strong driver for the company.

Following last year’s devastating oil spill in the Gulf of Mexico, the process of drilling for oil and gas has come under extra scrutiny, especially for companies that are at the business-
end of the hydrocarbon extraction process, safety is at the top of their minds.

“Our dedication to health and safety is matched by a commitment to reducing the environmental impact of our operations to an absolute minimum,” says Al Suwaidi.

“This is essential for the long term sustainability and success of our business. We operate under a strict HSE management system of which environmental protection is a major part.

In addition to preventing any discharge to the environment, we also place high importance on well control readiness. This translates into crew skills assurance, equipment fitness and maintenance and the use of up to date technology.”

One of the recent most important milestones achieved by NDC was that of being accredited the ISO14001 surveillance audit. In June 2010, NDC was re-certified for another three years which Al Suwaidi says, reflects NDC’s commitment and dedication towards protection of the environment.

“NDC management believes that achieving drilling and work-over activities can be accomplished in tandem with taking care of the environment,” he concludes.

Ground Water Research Programme

Using its drilling expertise NDC partnered with the US Geological Survey (USGS) to help understand the quantity, quality, and distribution of ground water and to help safeguard these reserves for Abu Dhabi.

The programme it is jointly involved is known as the Ground Water Research Programme (GWRP), providing research on groundwater resources and the hydrology of the Emirate.

NDC has deployed its drilling equipment to drill observation wells in areas such as Al Ain near Abu Dhabi. GWRP has drilled over 600 research wells. NDC took over programme planning and management for the GWRP in 1998.

National drilling company through the years:

• 1972 National Drilling Company (NDC) is established by a resolution of the Abu Dhabi Council of Ministers.
• 1973-74 NDC takes delivery of its first onshore rigs, ND-01 and ND-02.
• 1975 NDC acquires its first offshore rig, ND-03, naming it Al-Ittihad.
• 1976-79 NDC expands its offshore fleet to a total of five rigs.
• 1980-85 NDC establishes an offshore supply base and workshop, and buys one offshore, four onshore and three water well rigs.
• 1986-87 Collapse of oil prices. NDC restructures, institutes a maintenance programme for idle rigs, and purchases two additional water well rigs.
• 1989-93 Acquisition of five offshore and four onshore rigs
• 1994 NDC commissions the construction of 19 -storey headquarters building.
• 1998 NDC acquires two new onshore rigs, bringing the rig total to 13 onshore, 10 offshore and 6 water well rigs. NDC moves into its newly completed 17-storey headquarters building.
• 2000 Implementation of the Well Delivery Limit (WDL) initiative saves 536 working days on 35 wells drilled onshore and 47 working days on four wells drilled offshore.
• 2003 Three new environmentally friendly rigs, with state-of-the-art automation and HSE safeguards (ND-31, ND-32 and ND33) start operations in the sensitive area of Al Dhabiya Island.
• 2004 Fourth new rig acquisition, onshore rig ND-34 starts operations.
• 2005 Addition of the Multi-Purpose Service Vessel (MPSV) Al-Ghweifat. Offshore rig Al-Hail begins operations.
• NDC awarded the ISO 14001: 2004 Certificate for environment protection.
• 2008 NDC acquires two new onshore rigs, ND-38 & ND-50 bringing the onshore rig total to 18 rigs. ND-17 completes 13 years without Lost Time Incident.
• 2009 NDC wins ADNOC Health, Safety and Environment 2008 Award in safety category.
• 2010 NDC signs contract renewal for the manufacture of onshore drilling rigs with China Petroleum Technology and Development (CPTDC), Baoji Oilfield Machinery Co. (BOMCO), OILMAN. NDC and ADCO celebrated an important HAS milestone with rig ND-09