Saudi Aramco has signed agreements with Nabors Industries Ltd. and Rowan Companies plc, to create two joint ventures focused on onshore and offshore drilling
The new joint ventures mark a significant step towards the development of a competitive Saudi energy sector, as envisioned in the company’s In-Kingdom Total Value Add (iktva) localisation programme and Saudi Vision 2030, which supports the wider development and localisation of industries such as rig and rig equipment manufacturing and casting and forging.
Amin H. Nasser, Saudi Aramco President and CEO said, “We look forward to successful partnerships with Nabors and Rowan to drive a best-in-class drilling industry, provide opportunities to manage drilling costs through increased collaboration, drive localisation of the energy value chain, and enhance in-Kingdom technical capabilities.
“These initiatives represent an unprecedented new large scale model of collaboration, with substantial value creation for both Saudi Aramco and its partners through a closer working relationship. These investments are part of a wider program to leverage our core activities, to help enable the sustainable development of the Kingdom’s economy through diversification, and the development of an internationally competitive and dynamic local energy sector, supported by national champions.”
The joint ventures with Nabors and Rowan were announced as part of Saudi Aramco’s iktva Forum 2016, which marked the one year anniversary of the iktva localisation initiative designed to drive domestic value creation and maximise long-term economic growth, diversification, job creation and workforce development. Iktva aims to achieve 70 per cent localisation of all spending on goods and services, and to enable 30 per cent export of Saudi energy sector products by 2021.
The onshore and offshore drilling joint ventures will invest US$6bn to US$7bn to purchase onshore rigs and offshore jackups, manufactured in Saudi Arabia by Saudi Aramco manufacturing joint ventures, which are in the process of being set up. The joint ventures will create an additional 5,000 jobs with an aim to achieve 80 per cent Saudization levels. It is anticipated that the joint ventures will commence operations in the second quarter of 2017.
