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Arabian Drilling Co. (ADC), a leading national provider of onshore and offshore oil and gas drilling services in Saudi Arabia, has reached an agreement with Saudi Aramco to temporarily halt contracts for two offshore drilling rigs and not extend the current contract for a third rig.
ADC disclosed to the Saudi Stock Exchange (Tadawul) that the suspension of contracts for two offshore drilling rigs could last up to 12 months, and a decision was made not to extend the current contract for a third platform, which is set to expire in June.
The reason cited for this decision was the substantial capital expenditure investments that would have been necessary to extend the contract.
The company is actively exploring new commercial opportunities to relocate the rigs, both within and outside of Saudi Arabia.
Despite an anticipated decrease in revenue due to reduced offshore rig activity, Arabian Drilling anticipates year-on-year revenue growth in line with previously announced expectations for 2024, with projected revenue ranging between SAR 3.6 billion and SAR 3.9 billion.
This growth is supported by the early deployment of three Unconventional Gas Land Rigs, which began their contracts ahead of schedule, while the remaining seven rigs are expected to gradually come online during the third quarter of 2024.
