ADNOC Drilling expects topline growth to $4.8B in 2025: CFO

Youssef Salem, Chief Financial Officer of ADNOC Drilling Co. expects the company’s revenues to increase by 15-20% by the end of 2025, reaching between $4.6-$4.8 billion, compared to $4 billion in 2024.

In an interview with Argaam on the sidelines of the Capital Markets Forum in Hong Kong, the CFO stated that the company is targeting revenues exceeding $5 billion in 2026.

He also stated that ADNOC Drilling registers high EBITDA margins of over 50%, which is among the highest margins in the traditional drilling and services sector.

Moreover, the company signed new contracts last month worth $4 billion, including $3.6 billion in domestic contracts within the UAE. These include new five rigs: two jack-up offshore rigs and three island rigs, in addition to a contract for offshore oil services.

The contracts span durations of up to 15 years and will end by 2040. These agreements are expected to support the company's long-term business growth, according to the CFO.

Salem also noted that ADNOC Drilling announced the acquisition of a 70% majority stake in SLB’s onshore drilling operations in both Oman and Kuwait, including eight active rigs in the two countries. This move will add nearly $400 million in new awards to the company’s portfolio.

He indicated that the company currently owns around 150 rigs, including 47 offshore rigs and over 100 onshore rigs. 140 rigs are located within the UAE, with the remainder distributed in Jordan, Kuwait, and Oman.

The acquisition in Kuwait and Oman operations will provide additional expansion opportunities, whether by increasing the number of rigs or participating in new tenders. The company will also leverage its service platform in those markets, which currently account for 25% of its total revenues, according to the CFO.

Salem added that the acquisition will boost the company’s financial returns, as it will generate cash flows equivalent to more than 15% of the acquisition value, which will reflect in higher cash dividends to shareholders. He expects dividend payouts to exceed $5 billion over the next five years, representing more than 20% of the company's capitalization.

As for his outlook for the oil market in 2025, Salem said that the region enjoys the lowest production cost per barrel and the lowest carbon emissions globally, making Middle Eastern oil the most requested worldwide.

He also pointed out that crude producing countries in the region continue to implement expansion projects. “ADNOC aims to raise its production capacity to 5 million barrels per day (bpd) by 2027. Kuwait targets production of 4 million bpd, alongside significant growth in gas production, especially at the Jafurah project in Saudi Arabia and a 30% increase in natural gas output in the UAE,” he said.