HOUSTON– Rowan Companies plc has reported that ARO Drilling, its 50/50 joint venture with Saudi Aramco, commenced operations on Oct. 17, 2017.
As part of the initial startup, Rowan and Saudi Aramco contributed equal amounts of cash into the joint venture. Following these contributions, Rowan sold three of its jackup drilling rigs, including theJ.P. Bussell, which was previously idle, and Saudi Aramco sold one of its jack-up drilling rigs to ARO Drilling.
Following the purchase of these drilling rigs, ARO Drilling distributed excess cash in the amount of about $88 million to each of Rowan and Saudi Aramco maintaining each party’s 50% ownership interests in the joint venture.
Saudi Aramco will sell another jackup rig in 2017 and Rowan will sell two more jackup rigs to ARO Drilling once they complete their current contracts in late 2018.
The joint venture also now manages the operations of Rowan’s seven remaining jackup rigs currently in Saudi Arabia.
Rowan and Saudi Aramco have agreed that the joint venture will purchase 20 future newbuild rigs that will be constructed by aSaudi Aramco manufacturing joint venture 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.
Tom Burke, president and CEO of Rowan, said: “We are extremely pleased to announce the launch of 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.”