Abu Dhabi drilling company expands further into Oman and Kuwait

Abu Dhabi-based ADNOC Drilling announced plans to buy an 80 per cent stake in regional drilling and oilfield services provider MB Petroleum Services (MBPS) for $204 million (£157 million), according to a news release from the drilling company dated November 5th. 

The deal marks the oil company’s second significant regional acquisition after it bought into SLB’s onshore rig business in Oman and Kuwait. Reportedly, the transaction is expected to be closed in the first six months of next year, subject to regulatory ratification. 

Reuters reported on November 5th that the acquisition adds 21 rigs, 13 in Oman, four in Kuwait and four in Bahrain, and is anticipated to increase earnings, cash flow and returns, increasing footprint in the region.  

“The transaction represents a strategic leap that is expected to amplify our capabilities, accelerate our regional momentum and reinforce our position as a key energy services provider in the region,” said ADNOC Drilling’s chief executive Abdulla Ateya Al Messabi.

“Upon completion, this partnership not only will strengthen our regional footprint but also position us to deliver enhanced value to our clients and shareholders in a rapidly evolving energy landscape.”

ADNOC Drilling’s chief financial officer Youssef Salem said in an interview to Reuters on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) in Abu Dhabi:  “From an oil price perspective, there is pressure,” but underlying drilling operations in the UAE, Oman and Kuwait have increased and Saudi Arabia is “on the recovery.”

Salem added that the rigs are operational and have a $270 million (£207 million) backlog which surpasses the acquisition cost. The rigs also operate under contracts that extend as late as 2033. 

It was reported on October 29th that Saudi Aramco, announced the completion of an $11 billion investment deal with a consortium of investors for its Jafurah gas processing facilities.

Meanwhile, QatarEnergy signed a 17-year Sales and Purchase Agreement (SPA) with India’s Gujarat State Petroleum Corporation (GSPC) for the supply of up to 1 million tons per year of liquefied natural gas (LNG) to India.

ADNOC Drilling, Reuters, Maghrebi.org