Saudi Aramco, the world’s largest oil exporter, is embarking on a massive offshore rig contracting spree, with more than 30 jack-up rigs likely to be chartered by the state-owned giant in an ongoing contracting drive.
A total of 26 new jack-up contract awards have been made by Aramco since March, with another five expected within the next month, according to upstream-focused consultancy Westwood Global Energy.
Aramco’s ambitious offshore rig expansion comes at a time when the company has reported a record quarterly profit of $39.5 billion from soaring oil prices.
Saudi Arabia is rapidly scaling up its oil production, with Aramco expected to boost its production capacity to 13 million barrels per day by 2027, up from the present 12 million bpd capacity.
Project watchers told Upstream that a majority of incremental oil production in Saudi Arabia is likely to come from its offshore oilfields, led by the Marjan and Zuluf incremental schemes that are presently under execution.
Increased activity in the country’s flagship offshore oilfields mandates the hiring of an expansive feel of specialised offshore rigs for drilling exploration and development wells.
As the most recent contracting round concludes, Aramco will boast of a jack-up drilling fleet of 78 rigs, most of which are being contracted on multi-year contracts ranging from three to five year charters, Westwood said.
Aramco is also expected to tender for 10 additional offshore rigs, but the timeline for the new tender is not yet clear.
“Should all 10 jack-ups be added, it will push the number of contracted units for Saudi Aramco to 88, right up against its reported goal of having 90 jack-ups working by the end of 2024,” Terry Childs, head of RigLogix at Westwood said in the report.
Childs noted that that five of the 31 rigs in the current tender “were stranded newbuilds that have either been purchased or bareboat chartered from their respective build yards”.
“Of the remaining 26, 16 were long-idled or cold stacked units, with most sitting longer than a year. The remaining 10 units are either currently working or have only been idle for only a few months,” he added.
Rig contract winners
Middle East-based Advanced Energy Services (ADES) has been the big winner so far in the most recent tendering exercise by Aramco, with the rig player likely to supply 17 of the 31 rigs.
“As a result of its purchase spree, the company will now manage 32 jack-ups, behind only China Oilfield Services Ltd (COSL), but nudging it past the likes of Shelf Drilling, Borr Drilling and Valaris,” Childs said.
Other Aramco contract winners for up to two to three rigs each include Arabian Drilling, Seadrill, COSL, Saipem, Valaris and Borr Drilling, the report said.
Jack-up dayrates for the Saudi rig contracts have firmed up to between $78,000 to $98,000 apiece, significantly higher than the previous dayrates, it added.
Dayrates for offshore jack-up rigs have been on the mend globally, led by record oil prices and tightening supplies in the rig market.