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Image courtesy of Nabors Industries.

Nabors Industries Ltd. said on Monday that it has signed a new joint venture with Saudi Aramco to operate onshore rigs.

Nabors said the new joint venture will be located in Saudi Arabia and will own, manage and operate onshore drilling rigs.

The joint venture will be equally owned by Saudi Aramco and Nabors and is anticipated to be formed and commence operations in the second quarter of 2017.

The joint venture is part of a broader plan being implemented in Saudi Arabia aimed at boosting the kingdom’s economic diversification and job creation.

Saudi Aramco vice president for procurement and supply chain management Abdulaziz al-Abdulkarim said in September that his company plans to invest about $334 billion by 2025.

That investment level is up from the $300 billion the company said it would spend over the same period when it announced the In-Kingdom Total Value Add (IKTVA) plan last year.

The IKTVA plan also calls for 70 percent of the energy-related goods and services related to the plan to the to be locally produced by 2021.

Nabors said the joint venture is “one of the anchor projects that has grown out of this strategy which supports the wider development and localization of industries such as rig and rig equipment manufacturing and casting and forging.”

Nabors said the joint venture will leverage its established business in Saudi Arabia to begin operations, with a focus on Saudi Arabia’s existing and future onshore oil and gas fields.

Saudi Aramco and Nabors will each contribute land rigs to the venture in the first years of operation along with capital commitments toward future onshore drilling rigs that will be manufactured in Saudi Arabia.

“This venture represents a new chapter in the operator – contractor relationship. We fully expect the venture’s shared interest and collaborative efforts to result in even higher levels of safety and efficiency, while enhancing Saudi Aramco’s well productivity and cost savings,” Nabors Chairman, President and CEO, Anthony G. Petrello said.

Nabors Industries reported third quarter 2016 operating revenues of $519.7 million, compared to operating revenues of $571.6 million in the second quarter of 2016.

Net income from continuing operations attributable to Nabors came in at a loss of $99 million for the third quarter compared to a loss of $183.7 million in the previous quarter.

“After a challenging downturn, we are experiencing significant utilization increases in our Lower 48 market, although spot market pricing continues to remain competitive.  Similarly, our international markets are showing signs of impending activity increases,” Nabors’ chairman, president and CEO Anthony Petrello said.