ADES to earn $57,000 daily from Nigeria deal: CEO

Mohamed Farouk, CEO and Vice Chairman of ADES Holding Co.

ADES Holding Co.’s contract in Nigeria is structured as a bareboat charter (BBC) agreement, a standard contracting model in the drilling industry that aims to reduce operational costs, the CEO and Vice Chairman Mohamed Farouk told Argaam.

The contract is valued at approximately SAR 81.8 million, which is part of a comprehensive agreement between Britannia-U (primary client) and Valiant Offshore Contractors Ltd. (in-country partner). Under the agreement, ADES will receive a direct daily rate of $57,000, while the remainder is allocated to Valiant to cover operational expenses.

Farouk emphasized that the rental rate will be mostly reflected in earnings before interest, taxes, depreciation, and amortization (EBITDA) and overall profitability, comparable to or potentially exceeding ADES’ performance within the Kingdom. This highlights the company’s ability to operate profitably across diverse markets.

ADES is excited to expand into Nigeria, a nation with great potential in the oil and gas sector, the CEO said. The move aligns with the expected rise in demand for drilling rigs, particularly offshore jackup rigs, in the coming years.

Farouk stated that the partnership is a strategic step to jointly manage operations and ensure the success of ADES in the market, pointing out the importance of selecting the optimal charter structure to address the challenges in the new market.

Nigeria plays a vital role in OPEC and contributes significantly to the global oil market, he said.

As Africa’s largest oil producer, particularly in the offshore segment, the nation holds vast untapped oil and gas reserves, which fortifies its importance on the global energy landscape.

Farouk explained that Nigeria’s market has been left open to competition, but now is the time for ADES to actively participate in this expanding market.

The company is committed to exploring value-added opportunities in new markets to boost its strategic position, which aligns with the Kingdom’s Vision 2030 and elevates the global leadership of Saudi companies.

He noted that ADES continues to remain flexible through a customer-centric approach, ensuring that its operations are aligned with strategic objectives of its clients, while leveraging increased capabilities to explore opportunities in existing and new markets.

Farouk said that this approach reflects the company’s flexibility in dealing with market demand and its ability to exploit its strong presence on the international landscape to resume operations on suspended platforms swiftly and in record time.

The CEO emphasized that the Nigeria contract is crucial for ADES’ global expansion, given the growth in West Africa and Southeast Asia.

He added that the company is actively diversifying its geographic footprint and strengthening its competitive advantage by capitalizing on supply shortages in these emerging markets.

ADES is constantly seeking to explore value-added opportunities in new markets to

enhance its strategic position, in line with Vision 2030, which aims to enhance the global leadership of Saudi companies, Farouk said, quoting the directives of Crown Prince Mohammed bin Salman.