ADNOC Awards AED 5.2 Billion Contract for Construction of Ghasha Concession Artificial Islands Contract awarded to UAE’s National Marine Dredging Company accelerates momentum behind the Ghasha offshore ultra-sour gas mega-project Over 70% of construction spend on 10 new islands, 2 causeways and expansion of an existing island, will flow into the UAE’s economy under ADNOC’s In-Country Value program One of the largest marine environmental baseline surveys in the UAE’s history was conducted to minimize and mitigate any impact on environment Mega-project awarded after a rigorous and competitive tender process Abu Dhabi, UAE – February 6, 2019: The Abu Dhabi National Oil Company (ADNOC) announced, today, the award of a dredging, land reclamation and marine construction contract to build multiple artificial islands in the first phase of development of the Ghasha Concession. The contract awarded to the UAE’s National Marine Dredging Company (NMDC) is valued at AED 5.2 billion (US $ 1.4 billion) and will achieve a substantial In-Country Value of over 70 percent. The Ghasha Concession consists of the Hail, Ghasha, Dalma, Nasr, and Mubarraz offshore ultra-sour gas fields. Under the terms of the contract NMDC will construct ten new artificial islands and two causeways, as well as expand an existing island. The project is expected to take 38 months to complete and will provide the infrastructure required to further develop, drill and produce gas from the ultra-sour gas fields in the Ghasha Concession. At peak construction, the project is expected to employ over 3,500 people. The award was signed by Abdulmunim Al Kindy, ADNOC Upstream Executive Director, and Yasser Zaghloul, NMDC CEO, and was witnessed by UAE Minister of State and ADNOC Group CEO, His Excellency Dr. Sultan Al Jaber, and His Excellency Mohammed Thani Murshed Al Rumaithi, Chairman of NMDC. H.E. Dr. Al Jaber said: “This award accelerates the development of the Hail, Ghasha and Dalma ultra-sour gas offshore mega project, which is an integral part of ADNOC 2030 smart growth strategy. As one of the world’s largest ultra-sour gas projects it will make a significant contribution to the UAE’s objective to become gas self-sufficient and transition to a potential net gas exporter. “NMDC was selected after a rigorous and competitive tender process. The award of this mega project to a UAE company will generate substantial In-Country Value, supporting local economic growth. In addition, it demonstrates the rapid progress ADNOC is making to leverage and create value from Abu Dhabi’s substantial, untapped, hydrocarbon resources.” As part of the selection criteria for the contract, ADNOC carefully considered the extent to which bidders would maximise In-Country Value in the delivery of the project. This is a mechanism integrated with ADNOC’s tender evaluation process, aimed at nurturing new local and international partnerships and business opportunities, catalyzing socio-economic growth, and creating job opportunities for UAE nationals. The successful bid by NMDC included UAE sources for materials, as well as the use of local suppliers, manufacturers and workforce and a total local spend of over AED 3.62 billion (almost US$ 1 billion). H.E. Mohammed Al Rumaithi said: “We are proud of our partnership with ADNOC and to be awarded this exciting new mega project. We are also very pleased at the contribution this project will make to the local UAE economy, to supporting ADNOC’s gas developments, and to progressing the UAE's strategy is to develop the maritime sector, in order to compete globally." “Enhancing In-Country Value is an important part of our work plan in the National Marine Dredging Company as it is for ADNOC. We will achieve this by spending almost one billion dollars of the contract award in the UAE and creating additional employment opportunities for citizens in the maritime sector. We aim to increase the use of local resources; such as products, facilities and infrastructure in this sector of dredging equipment and services. NDMC will contribute to supporting the development and prosperity of the UAE”. Artificial islands provide significant cost and environmental benefits, particularly in shallow water, by enabling the use of lower cost land drilling rigs instead of high cost offshore jack-up drilling rigs. They also provide greater flexibility for extended reach drilling when compared to offshore rigs, which reduces the number of wells drilled and minimizes the environmental impact. ADNOC has a proven record of developing artificial islands including the construction of four artificial islands for the Upper Zakum expansion project. ADNOC’s Upper Zakum field is the second largest offshore oil field and the fourth largest oilfield in the world. Her Excellency Dr. Shaikha Salem Al Dhaheri, Acting Secretary General of Environment Agency – Abu Dhabi, also attended the signing ceremony and commented: “From the very early stages of exploration, ADNOC has worked in close partnership with the Environment Agency-Abu Dhabi (EAD) to ensure that this oil and gas development project, including artificial islands, is sustainable both for the environment and the people. This included conducting one of the largest marine environmental baseline surveys in the UAE’s history in order to assess the marine life in the area, understand any potential impacts and ensure that the development and management plans protect the diverse marine ecosystems and mitigate any potential impact on the sensitive habitats and endangered species. We look forward to continuing this close collaboration with ADNOC and EAD as together we manage and develop Abu Dhabi’s natural resources sustainably and for the benefit of our nation.” The names of the new islands in the Ghasha Concession were drawn from pearl diving sites in the area and reflect the rich history and culture of the region. They are Ghanem, Sawalem, Chananiz, Mudaifena, Reeah, Seebeh, Seemeh, Shalhah, Jzool and Duroob. The pearl diving tradition is tightly woven into the UAE culture and dates back around 7,000 years ago, much before oil was discovered in the country. ADNOC recently awarded stakes in the Ghasha Concession to Italy’s Eni (25 percent), Germany’s Wintershall (10 percent) and Austria’s OMV (5 percent). The mega-project is expected to produce over 1.5 billion cubic feet of gas per day when it comes on stream around the middle of the next decade, enough to provide electricity to more than two million homes. Also, more than 120,000 barrels per day of oil and high-value condensates are expected to be produced.