Saudi Arabia’s TAQA to acquire Schlumberger’s drilling business for US$415 mn

Saudi Arabia’s Industrialization and Energy Services Company (TAQA) says that its drilling subsidiary, Arabian Drilling Company (ADC) is to acquire Schlumberger’s Middle East onshore drilling rigs business in Kuwait, Oman, Iraq and Pakistan for US$415 million. It adds that the transaction will transform ADC into a regional drilling leader with one of the largest rig fleets, client portfolios and geographic footprints in the Middle East. ADC, a drilling rig partnership between TAQA and Schlumberger, was established in 1964 through a royal decree.

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Through this expansion, ADC says it will become an industry powerhouse, operating a superior fleet of 58 onshore rigs and 9 offshore rigs across the MENA region. The combined firm will have more than 5,900 employees and builds on ADC’s long-standing reputation of reliably serving national and international oil and gas companies for over 55 years.

The transaction will combine the track records of the parties with respect to operations, quality of service, health, safety and environment. It will also create economies of scale and cost synergies, making ADC a regional leader, encompassing a diversified, multi-country and multi-client offering.

For TAQA, the acquisition represents a major step forward in its ongoing group-wide transformation and growth strategy. TAQA’s 2021 strategy is to become a leading regional oilfield services and equipment (OFSE) company.

Commenting on the transaction, Azzam Shalabi, CEO, TAQA and Chairman of the ADC Board, 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. This new combination clearly demonstrates that TAQA and ADC are delivering on their transformation and growth strategies, and further strengthens what is already a long-standing and trusted partnership between TAQA and Schlumberger. We look forward to supporting ADC in the next phase of its expansion and have full confidence that this will benefit all stakeholders, most notably our regional clients.

The transaction is expected to close in the second half of 2019, subject to regulatory approvals.