Arabian Drilling Company (ADC) has agreed to acquire Schlumberger’s onshore drilling rigs business in Kuwait, Oman, Iraq and Pakistan, for SAR1.56bn ($415m).
The acquisition is expected to help Arabian Drilling become a regional drilling leader with one of the largest rig fleets, client portfolios and geographic presence across the Middle East.
The company is the drilling rig partnership between Saudi Arabia’s Industrialization and Energy Services Company (TAQA) and Schlumberger, which was established in 1964.
TAQA holds a stake of 51% in the limited liability partnership, while Schlumberger holds the remaining 49% stake.
The acquisition by the partnership will expand its fleet of 58 onshore rigs and nine offshore rigs across the Middle East and North Africa (MENA) region. It is expected to generate economies of scale and cost synergies to transform the company into a regional leader, which will be inclusive of a diversified, multi-country and multi-client offering.
Upon completion of the transaction, Arabian Drilling will increase its workforce to more than 5,900 employees.
For TAQA, the transaction is said to be an important step forward in its group-wide transformation and growth strategy. TAQA, under its 2021 strategy, strives to become a top regional oilfield services and equipment (OFSE) company.
TAQA CEO Azzam Shalabi said: “This acquisition is fully aligned with Saudi Vision 2030. It unlocks value and drives growth across our entire value chain through a more integrated regional approach, while positioning a leading Saudi company as a global player.”
“The transaction also follows on from ADC’s accelerated expansion activity in 2018 when 16 rigs were commissioned to support the growth of Saudi Aramco.”
Subject to regulatory approvals, the transaction is anticipated to be completed in the second half of 2019.
Earlier this year, Schlumberger agreed to form a joint venture with Rockwell Automation to provide fully integrated digital automation solutions to the oil and gas industry. The joint venture called Sensia will enable its oil and gas clients achieve efficiency gains by deploying measurement and data driven intelligent automation via its intelligent systems to 100% engineered life-cycle management automation solutions.