Arabian Drilling Co will provide Saudi Aramco with 10 onshore drilling rigs with full crew for the oil major’s unconventional programme in Saudi Arabia. With this, the total number of rigs contracted after the signing of these contracts will be (45) onshore rigs and (12) offshore units.
The company signed an agreement to this effect and the value of the contract is estimated to be more than $800 million and the contraction duration is five years from the commencement date of drilling operations, Arabian Drilling disclosed in a statement to Saudi bourse Tadawul, where its shares are traded.
The contract is expected to contribute to the company’s revenue from second quarter of 2024, the statement added. The new rigs are likely to be deployed on the giant $100 billion Jafurah gas development.
Aramco is developing Jafurah project in phases, aiming to produce up to 2 billion cubic feet per day of gas by 2030, which could be used to manufacture blue hydrogen and liquefied natural gas. Jafura has gas reserves of 200 trillion cubic feet. Jafurah is also home to the largest liquids-rich shale gas play in the Middle East, Aramco earlier noted.
The Jafurah field is 170 km long and 100 km wide between Ghawar, the world’s largest conventional onshore oilfield and the Saudi coast.
Meanwhile, Ghassan Mirdad, CEO of Arabian Drilling, said that they were delighted with Aramco’s trust in awarding Arabian Drilling these multiple contracts, providing them with the opportunity to establish the company’s footprint in the Unconventional Program.
“This award fits perfectly with our growth strategy execution and we have strengthened the company’s balance sheet precisely to be able to support growth capex opportunities like this one,” Mirdad said.
“We continue to see a positive outlook in the market and pursue our growth strategy in the Kingdom, while remaining focused on achieving the highest health, safety and environment standards across our operation,” he added.
According to Aramco, as part of Saudi Arabia’s efforts to diversify local energy resources, its unconventional program aims to develop these resources to fuel growing demand and enrich the larger energy industry landscape.
Unconventional fields are considered to be a potentially significant future source of long-term hydrocarbon production. However, it said that developing unconventional resources requires logistics that differ from those of standard conventional gas.
Saudi Aramco also launched Arabian Rig Manufacturing, a joint venture firm with American entity NOV, in October 2022 to manufacture drilling rigs and related equipment for the first time in the Kingdom.
Arabian Rig Manufacturing is located at Ras Al-Khair and is expected to reduce dependence on imported products in the country. The joint venture is part of Saudi Aramco’s ongoing efforts to localise rig manufacturing, in line with the Kingdom’s Vision 2030 and the In Kingdom Total Value Add program.