Rowan, Saudi Aramco to create new offshore drilling company

Rowan Companies and Saudi Aramco have agreed to create a joint venture to own, operate, and manage offshore drilling rigs in Saudi Arabia.

The new joint venture company will use Houston-based Rowan’s established business in Saudi Arabia as its base with a scope of operations covering Saudi Arabia’s existing and future offshore oil and gas fields. The new company is expected to commence operations in the second quarter of 2017.

“Rowan has had a long and mutually beneficial relationship with Saudi Aramco and we welcome this opportunity to further strengthen our partnership and extend our commitment to the region,” Tom Burke, president and chief executive officer, said in a statement. “The new company will uniquely position Rowan to participate in the growing Saudi Arabian offshore drilling market, and provide Rowan with a compelling opportunity for a long-term partnership with the world’s leading oil and gas company, and create a long-term, profitable growth platform with firm rig commitments.”

When the new company begins operations next year, Rowan will contribute three of its jackup drilling rigs and Saudi Aramco will contribute two jackups. Rowan will contribute an additional two jackups as they complete their current Saudi Aramco contracts in late 2018. The new company will also manage the operations of five Rowan jackups currently in Saudi Arabia, until their associated drilling contracts expire, which then may be released, leased by or added to the new company. Rowan and Saudi Aramco said the new company will purchase future newbuild rigs that will be constructed in Saudi Arabia.

Rowan is a global provider of contract drilling services with a fleet of 30 mobile offshore drilling units, comprised of 26 jackups and four ultradeepwater drillships. The company’s fleet operates worldwide, including the U.S. Gulf of Mexico, United Kingdom and Norwegian sectors of the North Sea, the Middle East and Trinidad.