Saudi Aramco signed two major agreements with Nabors Industries and Rowan Companies, to create two joint ventures focused on onshore and offshore drilling that marks a major milestone towards the development of a competitive Saudi energy sector.
The new JV's are part of the state oil company’s In-Kingdom Total Value Add (iktva) program and Saudi Vision 2030. The JV's will commence operations in the second quarter of 2017.
Amin H. Nasser, Saudi Aramco President and CEO said: “We look forward to successful partnerships with Nabors and Rowan to drive a best-in-class drilling industry, provide opportunities to manage drilling costs through increased collaboration, drive localisation of the energy value chain, and enhance in-Kingdom technical capabilities.”
The onshore and offshore drilling JV's will invest US$6 billion to $7 billion to purchase onshore rigs and offshore jackups, manufactured in Saudi Arabia by Saudi Aramco manufacturing joint ventures, which are in the process of being setup. The new JV firms will create an additional 5,000 jobs with an aim to achieve 80 per cent Saudisation levels.
The onshore joint venture will combine Nabors and Saudi Aramco’s existing onshore drilling operations in Saudi Arabia, with the joint venture covering segments of our current and future onshore oil and gas fields in the Kingdom. It will initially own 15 contributed rigs (five from Saudi Aramco and 10 from Nabors) and manage the remaining Nabors-owned rigs currently in Saudi Arabia, for a total fleet of 41 rigs. The total value of initial contributions is estimated at over $1 billion.
The offshore joint venture will combine Rowan and Saudi Aramco’s existing offshore drilling operations in Saudi Arabia. It will initially own seven contributed jack-up rigs (two from Saudi Aramco and five from Rowan) and will manage an additional four Rowan owned jack-ups currently in Saudi Arabia. The total value of initial contributions is estimated at over $1.2 billion.