RIYADH: In a significant expansion of its business, ADES Holding Co., a Saudi-based exploration service provider, has obtained a series of onshore drilling contracts with Kuwait Oil Co. valued at SR2.42 billion ($645.3 million).
The agreement encompasses renewals for four active rigs in Kuwait and the addition of two newly constructed rigs, as stated in an announcement to Tadawul.
These contracts are expected to take effect in the second and third quarters of 2025, each with a solid five-year term and the possibility of a one-year extension.
Mohamed Farouk, CEO of ADES Holding, remarked, “The procurement of these enduring contracts not only strengthens the predictability of our revenue but also underscores ADES’s exceptional standards in safety and operations, which will result in a tripling of our Kuwaiti fleet from four to 12 rigs by 2025.”
Farouk also stressed that these new contracts reinforce ADES’s robust foothold in the lucrative and challenging Kuwaiti onshore sector, known for requiring specialized drilling capabilities.
All six rigs are focused on deep drilling activities and fall within the 3,000-horsepower category, a segment experiencing growth within the Kuwaiti market.
The anticipated revenue backlog for these contracts, inclusive of the firm and optional periods, is estimated at SR2.42 billion.
The company has witnessed a substantial growth in its fleet over a span of 24 months, showing a threefold increase in contracted rigs with Kuwait Oil Co.
This rise is notable, with projections indicating an expansion from four rigs at the beginning of 2023 to an estimated 12 rigs by 2025.
Currently, ADES manages 10 onshore rigs for KOC in Kuwait, demonstrating its strong position and strategic alignment with the energy goals of the country.
In a previous expansion, ADES secured contracts totaling SR511 million, further cementing its influence in the oil and gas sector. This includes an offshore drilling platform operation in Qatar for TotalEnergies, valued at SR350 million with a one-year minimum term and an option to extend for up to 18 additional months, as per a market filing.
Operations for this project are scheduled to commence in the latter half of 2024, with the assurance that no related parties are involved.
In a separate deal, ADES won a 21-month contract to operate an elevated platform in the Gulf of Suez, awarded by Egypt’s Suez Oil Co (SUCO), with immediate commencement expected. This contract is valued at SR161 million, according to a Tadawul disclosure.
This venture in Egypt signifies a major step in ADES’s strategy to rejuvenate its regional operations, following recent contracts in Thailand and Qatar. It marks the reactivation of three out of five previously suspended platforms in Saudi Arabia, showcasing the company’s broader commitment to regional expansion.