Arab News, Thu, Mar 28, 2024 | Ramadan 18, 1445
Saudi ADES inks $66m deal to ramp up production in Egyptian oil fields
Saudi Arabia:
The production of Egyptian oil fields is poised to surge following a $66 million
investment deal between Saudi drilling firm ADES and the subsidaries of the
country’s petroleum corporation.
In a statement released on Tadawul, ADES Holding
Co. revealed the agreement entails a long-term commitment to invest $30 million
in Suez Oil Co., also known as SUCO, and $36 million in Offshore Shukeir Oil
Co., or OSOCO, within the initial three years of the contract to achieve
production increments.
The Saudi company stated that the agreement spans
a duration of 10 years, with the possibility of extending it for an additional
decade.
The statement clarified that ADES is entitled to
benefit from the returns of the additional production based on mutually
agreed-upon mechanisms.
Moreover, it highlighted that the investment
volume and payment schedule are linked to the levels of increase achieved in
production rates.
The alliance’s share of the production increment
ranges between 61 percent and 72 percent, with a benchmark price per barrel
determined according to market prices.
The company indicated that the commencement of the
agreement’s operations is anticipated within 90 days.
ADES has been expanding its operational footprint
to multiple countries. In November 2023, the company secured three new contracts
totaling $293 million, marking its entry into Indonesia and strengthening its
presence in Algeria.
The company had previously announced its entry
into Southeast Asia with a long-term contract valued at SR803 million ($214
million) with Pertamina Drilling Services Indonesia.
This contract, comprising a three-year firm period
and a two-year option, is slated to commence in the second half of 2024.
Headquartered in Al Khobar, ADES owns and operates
a large portfolio of offshore and onshore rigs across the Middle East and Asia,
according to its website.
It has over 7,500 employees and a fleet of 87 rigs
across seven countries in the Middle East and North Africa region and India.
This fleet includes 38 onshore drilling rigs, 46 jackup offshore drilling rigs,
two jackup barges, and one mobile offshore production unit.