RIYADH: Energy firm Saudi Aramco is potentially reviewing operational strategies as the oil giant engages in discussions with drilling companies to suspend its offshore processes for one year.
In a statement to Tadawul, Arabian Drilling, a leading national contractor in the Kingdom, announced ongoing discussions with Aramco regarding the pausing of contracts for three of its offshore rigs.
The company also indicated that the cessations could extend up to 12 months. It noted that the affected rigs and the timing of the suspensions have not been confirmed yet, promising to issue a market update once the discussions conclude.
Furthermore, ADES Holding Co., a global leader in oil and gas drilling services, disclosed that it has reached a mutual agreement with its client in Saudi Arabia to temporarily halt operations on five of its 33 offshore jack-ups operating in the Kingdom for a similar period.
Commenting on the update, Mohamed Farouk, CEO of ADES Holding, said: “We remain in active and healthy discussions with our major client in Saudi Arabia following the latest developments in the Saudi market as we continue to demonstrate agility with a client-centric approach — aligning with our client’s strategic needs and objectives — and while preserving the remaining backlog of the temporary suspended contracts.”
ADES also stated that one of the halted rigs will be utilized for the group’s newly acquired project in Thailand, scheduled to begin operations in the latter half of 2024. Additionally, a second installation is positioned for an upcoming opportunity in the region.
The temporary suspensions, ADES noted, will take effect seven days from the signing date of the mutually agreed break notice or upon completion of ongoing work and release of the drilling unit, whichever occurs later.
Although the drilling firm did not name the client in its release, it added in its statement: “The suspension mechanism offers enough flexibility for the suspended rigs to complete the firm and optional terms of new deployments before resuming work in Saudi Arabia post suspension. The original term of the suspended contracts will automatically be extended for a period equal to the suspension for each rig, preserving the remaining backlog for the respective contracts.”
On March 10, the energy and petrochemical giant announced its 2023 financial results, reporting a net income of $121.3 billion, marking the second-highest in its history. The company stated that the results reflect its continued commitment to creating value for its shareholders.
