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Adnoc signs $1 billion framework agreements

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on August 23, 2021
The nature of the agreements underpins Adnoc’s smart approach to procurement which is enabling it to drive value and commerciality across its portfolio. — File photo

The framework agreements – which were signed with eight top-tier global engineering contractors – have the potential for 50 per cent of the value to flow back into the UAE economy


The Abu Dhabi National Oil Company (Adnoc) announced on Monday the signing of framework agreements worth nearly $1 billion 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 the potential for 50 per cent of the value to flow back into the UAE economy under Adnoc’s In-Country Value programme during the agreement term between 2021 and 2026, the energy conglomerate said in a statement.

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,” the company said.

Abdulmunim Saif Al Kindy, Adnoc People, Technology & Corporate Support executive director, said the framework agreements follow a very competitive tender process and the smart nature of the deals will deliver substantial cost savings, optimise 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,” said Al Kindy.

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.

Adnoc 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, the statement said.

— issacjohn@khaleejtimes.com

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.





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