Rowan Companies plc and the Saudi Arabian Oil Company have signed, through their subsidiaries, an agreement to create a 50/50 joint venture to own, operate, and manage offshore drilling rigs in Saudi Arabia.
The new joint venture company will use 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 anticipated to commence operations in the second quarter of 2017.
Tom Burke, President and Chief Executive Officer, stated, "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. 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."
At commencement of operations of the new company, Rowan will contribute three of its jack-up drilling rigs and Saudi Aramco will contribute two of its jack-up drilling rigs. Rowan will contribute an additional two jack-up rigs as they complete their current Saudi Aramco contracts in late 2018. The new company will also manage the operations of five Rowan jack-up rigs currently in Saudi Arabia, until their associated drilling contracts expire, which then may be released, leased by or contributed to the new company thereafter. Rowan and Saudi Aramco have committed the new company to purchase future newbuild rigs that will be constructed in Saudi Arabia.