Home Fossil Energy With suspension of 12 more jack-ups, rig pool in Middle East narrows down
April 5, 2024,
by
Melisa Cavcic
Three more offshore drilling players – ADES Holding Company, COSL, and Arabian Drilling – have joined the club of rig owners that have confirmed a temporary suspension of operations for one or more jack-ups in their fleets, which are working in the Middle East. While not all firms have revealed their clients’ identities, all rigs are rumored to be working for Aramco, thus, the Saudi energy giant’s string of suspensions is believed to have been issued for 18 rigs so far.
Illustration; Source: Arabian Drilling
A suspension of operations of up to 12 months has been arranged for five of ADES’ 33 offshore jack-ups operating in Saudi Arabia. One of these suspended rigs is expected to be deployed to a recently awarded campaign in Thailand, which is scheduled to start in the second half of 2024. The drilling player explains that another of these rigs is poised for an ”imminent” opportunity in the region.
Dr. Mohamed Farouk, CEO of ADES Holding, commented: “We remain in active and healthy discussions with our major client in Saudi Arabia following the latest developments in the Saudi market as we continue to demonstrate agility with a client-centric approach – aligning with our client’s strategic needs and objectives – and while preserving the remaining backlog of the temporary suspended contracts.”
These temporary suspensions for five rigs are due to become effective seven days from the signing date of the mutually agreed suspension notice, or when the work currently in progress is completed and the drilling unit is released, whichever is later. ADES underlines that the suspension mechanism offers enough flexibility for the suspended rigs to complete the firm and optional terms of new deployments before resuming work in Saudi Arabia post-suspension.
In addition, the original term of the suspended contracts will automatically be extended for a period equal to the suspension for each rig. While the new contract award in Thailand and the second imminent award in the region come at higher daily rates, compared to ADES’ current offshore average daily rates, the company will continue to market the remaining rigs globally.
Farouk further noted: “Concurrently, with the very high utilization rates of our offshore fleet over the past few years, new capacities made available will provide ADES with further flexibility when expanding its footprint in existing and attractive new markets. This will allow us to further capitalize on the current tight market conditions with significantly high utilization and elevated daily rates and build on our recent award in Thailand and the other potential one in the region while strengthening profitability.
“Overall, management remains confident in the Group’s growth prospects on account of its strong global platform, with a leading presence across nine of the most attractive drilling markets and a highly marketable and demanded fleet of jack-up rigs,