Arabian Drilling agrees with Aramco to suspend contracts for offshore drilling rigs

Arabian Drilling Co. (ADC), one of the largest national onshore and offshore oil and gas production companies in Saudi Arabia, has agreed with Saudi Aramco to suspend the contracts for two offshore drilling rigs and not to renew the current contract for the third rig.
ADC said in a disclosure to the Saudi Stock Exchange (Tadawul) that contracts for two offshore rigs have been suspended for up to 12 months and that an agreement has been reached not to renew the current contract for a third rig, which expires this June.
The reason given was “significant investments in the investment volume that would have been necessary for an extension of the contract”.
The Company is currently in discussions with various parties to explore new commercial opportunities to reposition the drilling rigs, including outside Saudi Arabia.
According to an announcement on Tadawul, Arabian Drilling expects year-on-year revenue growth in line with previously announced indicative expectations for 2024, ranging between Saudi Riyals 3.6 billion and 3.9 billion, despite expected revenue losses of approximately Saudi Riyals 190 million due to reduced offshore rig activity.
Revenue growth will be further supported by the early contribution of three onshore unconventional gas rigs that commenced their contract ahead of their originally planned start date, with the remaining seven rigs expected to come online gradually in the third quarter of 2024.