Developing manufacturers, services, and technologies, Saudi Arabia move towards reducing its dependency on oil revenues in line with Saudi Arabia's Vision 2030. Taqa venture's deal of acquisition of Texas-based Schlumberger Ltd. rig business in the region for $415mn (SAR1.56bn) is the best example.
Saudi Arabia's Industrialization &Energy Services Co., known as Taqa announced Sunday the acquisition,through its subsidiary, the Arab Drilling Company (ADC), of Schlumberger rig business in theMiddle East for $415mn (SAR1.56bn).
Thanksto this deal, ADC's Saudi operations will expand to include Schlumberger's onshore oil-rig business in Kuwait, Oman,Iraq, and Pakistan. This means that 58 onshore and nine offshore rigs will bein ADC's hand, raising the total number of ADC's drilling rigs to67 while the other oilfield services business in the region will be kept by Schlumberger.
ADC islooking forward to acquire any competitive services, technologies, ormanufacturers to widen the complementary works of drilling and excavation andcompete other global companies. The current plan's priority is to promote thecompany business in the five countries as being promising markets, especiallyIraq, considering its ability to work outside them, according to Taqa CEO, AbedAS-Saadoun.
It'snoteworthy that Saudi Taqa, partly owned by the Saudi PIF and holds 51%of ADC, expects $1.2bn in America and the Middle East drilling-rigbusiness. Taqa agreed on paying $415mn toSchlumberger as a first step of the deal to be completed in the second half of2019 after getting the necessary regulatory consents. Dedicating around $800mnof its own funds for the planned acquisition deals, Taqa may seek loans, sellbonds, or even consider an initial public offering in 2021 for the rest.
"Seekingto improve the technological and manufacturing capabilities, Taqa works on twodeals in North America for the current year." CEO, Azzam Shalabi saidin an interview in Dammam, Saudi Arabia.
Taqa'sbusinesses amount to SAR4.8bn; 51% of them comes from the drilling works, 31% comesfrom the manufacturing, and the rest comes from the surveying works. Thisacquisition deal was made after the largest expansion of Taqa; the introductionof 16 drilling rigs with investments of about $533mn (SAR2bn), and the introductionof more drilling rigs in Kuwait and Iraq to expand the company's work there. ADC'sdrilling works annually develop by 4% and 6% in Kuwait and Iraq respectively. Afterthe acquisition, ADC will have three drilling rigs in Iraq.
These efforts, as a whole target diversifying sources of Saudi income other than oil sales. The world's biggest oil exporter, Saudi Aramco strives for increasing oilfield services owned by the Kingdom in the region with large-scale expansion projects for the next ten years.
