ARO Drilling, a 50-50 joint venture of Saudi Aramco and Rowan Cos. PLC, started operations on Oct. 17, Rowan reported.
As part of the startup, Aramco and Rowan contributed equal cash to the combine, which subsequently acquired one jack up rig from Aramco and three jack ups from Rowan, including the previously idle JP Bussell. Following the rig purchases, ARO Drilling distributed excess cash totaling $88 million to each of Aramco and Rowan, maintaining each party's 50% ownership interests in the group.
Pursuant to the ARO Drilling shareholders' agreement, the combine will buy another jack up from Aramco in 2017 and two more from Rowan once they complete their current contracts in late 2018. ARO Drilling also now manages Rowan’s seven remaining jack ups currently in Saudi Arabia.
The JV also plans to purchase 20 future newbuild rigs that will be constructed by an Aramco manufacturing JV and are expected to be delivered between 2021 and 2030. Each newbuild is expected to have a 16-year drilling commitment upon delivery to ARO Drilling.
“This is a groundbreaking joint venture that supports Saudi Arabia’s Vision 2030 and provides Rowan with an unparalleled long-term growth opportunity throughout the next decade and beyond,” commented Thomas P. Burke, Rowan president and chief executive officer.
Aramco last year signed agreements with both Rowan and Nabors Industries Ltd. to launch separate drilling combines (OGJ Online, Mar. 2, 2017). Aramco in May signed deals totaling a reported $50 billion with various US firms that will pave the way for the state-run firm to “enhance its business synergy with the US as well as attract investments from its US counterparts to the kingdom (OGJ Online, May 22, 2017).”