ADNOC Drilling to acquire 70% stake in JV with SLB for $112 million

Deal News | May 29, 2025 | Zawya

ADNOC Drilling to acquire 70% stake in JV with SLB for $112 million

ADNOC Drilling Co., a prominent entity listed on the Abu Dhabi Securities Exchange (ADX), has announced its intention to purchase a 70% stake in a joint venture with SLB, the former Schlumberger Limited, for $112 million. This venture includes eight land drilling rigs, fully operational under contracts with national oil companies in Kuwait and Oman. The transaction, anticipated to be finalized in Q1 2026, awaits regulatory approval. The acquisition signifies ADNOC Drilling's strategic ambition to gain a 10% market share in the Oman and Kuwait regions, aiming for a fleet of 30 rigs. With funding sourced from existing debt capacity, ADNOC Drilling foresees integrating the new assets into its financials by 2026. The deal is characterized by an accretive 3.5x EV/EBITDA valuation, potentially offering a 15% internal rate of return (IRR), as per Citi Research. This step aligns with ADNOC Drilling's strategic objectives, highlighting its competitive positioning in the regional oil drilling market.

Sectors

  • Energy
  • Oil & Gas Equipment & Services

Geography

  • United Arab Emirates – ADNOC Drilling is based in the UAE and this market is a significant base for its operations and expansions.
  • Kuwait – Kuwait is one of the primary markets where the joint venture's land drilling rigs are currently operational.
  • Oman – Oman is the other key market where the joint venture's land drilling rigs are operational, significant to the JV's operations.

Industry

  • Energy – The acquisition involves the land drilling rigs segment, which is an integral part of the oil and gas sector within the energy industry.
  • Oil & Gas Equipment & Services – ADNOC Drilling and SLB both operate within the sphere of oil field services, specifically focusing on the provision of drilling services and technological solutions.

Financials

  • $112 million – The acquisition price for the 70% stake in the joint venture.
  • 3.5x EV/EBITDA – The valuation multiple associated with the transaction, which is considered accretive.
  • 15% IRR – The estimated internal rate of return from the acquisition, providing a premium over current frameworks.

Participants

NameRoleTypeDescription
ADNOC Drilling Co.Bidding CompanyCompanyADNOC Drilling is a part of the Abu Dhabi National Oil Company group and is engaged in drilling and related oil field services.
SLB (Schlumberger Limited)Selling CompanyCompanySLB is a technology and services provider to the energy industry, which is involved in the joint venture with ADNOC Drilling.
Citi ResearchAnalystCompanyCiti Research provided the financial analysis of the transaction, forecasting potential returns and valuation metrics.