Saudi ADES inks $66m deal to ramp up production in Egyptian oil fields
Oil fields in Egypt are poised to witness a surge in production following a $66 million agreement between Saudi drilling firm ADES and the country’s petroleum corporation.
In a statement released on Tadawul, ADES Holding Co. announced the signing of a long-term agreement with the Egyptian General Petroleum Corp. to boost oil production.
The deal entails a long-term commitment, wherein ADES plans 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 10 years.
The statement clarified that ADES is entitled to benefit from the returns of the additional production based on mutually agreed-upon mechanisms. 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 based on the total oil barrel production, 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 Alkhobar, ADES owns and operates a large portfolio of offshore and onshore rigs across the Middle East and Asia.