Beirut (APD) - Saudi Arabia-based Abdullah Rasheed Al-Rushaid Company for Drilling Oil and Gas Ltd (Al Rushaid) and U.S.-based Parker Drilling Company have established a 50:50 joint venture oil sector firm, the two companies said in a statement on Wednesday.
The joint venture named Al-Rushaid Parker Drilling is a Saudi Arabian limited liability company.
Al-Rushaid Parker Drilling will carry out four drilling contracts. Each of these deals has a three years term with a one year option, awarded by Saudi Aramco.
The partners did not disclose the value of their drilling contracts.
The new company will "utilize new build rigs to perform the contracts, with the first rig scheduled to arrive on location in Saudi Arabia in the third quarter of 2006, and the three remaining rigs to be delivered in the fourth quarter of 2006," the statement said.
The two founding companies will equally finance part of the acquisition costs of the four new land rigs through capital contributions totaling $20 million. The remaining part will be funded through asset-based financing that Al-Rushaid Parker Drilling was able to secure.
"These contracts represent Parker's first entry into the Saudi Arabian land drilling market," the statement said.
"This project is in line with our stated objective of seeking new growth opportunities in targeted markets with acceptable rates of return," said Robert L. Parker, Jr., president and chief executive officer of Parker Drilling.
"Although the financial impact to Parker should be minimal during initial years of the project, this market offers excellent opportunities for sustained growth for many years to come," he added.
Abdullah Rasheed Al-Rushaid Company for Drilling Oil and Gas is a subsidiary of Al-Rushaid Investment Company, which is a large group with major operations in the oil and gas industry in Saudi Arabia.
Parker Drilling is a Houston-based, global energy company specializing mainly in offshore drilling in the Gulf of Mexico and other land and offshore markets. [TS]
By Shikrallah Nakhoul, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2006
