Page 5 - MEOG Week 39 2021

MEOG COMMENTARY MEOG

The fleet will be key to the parent firm achiev- down the IPO path by one of its key competitors,
ing its crude production goals of raising output Saudi state-backed Arabian Drilling Co. (ADC).
from 4mn barrels per day to 5mn bpd by 2030. Earlier this year, sources told Bloomberg that
The IPO follows months of speculation and plans for a listing would give ADC a total valua-
ADNOC having already successfully listed a tion of around $2bn.
share in its retail fuel division, ADNOC Distri- Saudi’s Industrialisation & Energy Services
bution, in 2017 as well as raising around $15bn Co. (Taqa) owns a 51% stake in ADC, with
through deals to lease out then lease back oil and global services specialist Schlumberger holding
gas pipeline infrastructure, a model being copied the remaining 49%.
by regional competitor Saudi Aramco. Speaking on condition of anonymity, the
sources said that ADC had asked banks to pitch
Cashing in for work in the potential listing.
With Gulf energy investing becoming even more The company was formed in 1964 and lists
palatable amid buoyant oil prices, NOCs around major clients including Aramco, Schlumberger
the region have tapped international markets, and Al-Khafji Joint Operations (KJO) – the
taking advantage of the renewed optimism. joint venture between Kuwait Petroleum Corp.’s
In June, both Aramco and Qatar Petroleum Kuwait Gulf Oil Co. (KGOC) subsidiary and
closed multi-billion-dollar deals that were sev- Aramco subsidiary Aramco Gulf Operations
eral times oversubscribed, while recently formed Co. (AGOC) that manages the offshore portion
Energy Development Oman (EDO) experienced of the partitioned neutral zone (PNZ).
similar levels of interest in August. ADC’s fleet of rigs includes 38 onshore rigs
QP and EDO tapped bond markets to raise of various sizes “designed to work in harsh cli-
$12.5bn and $2.5.bn each, with those deals matic conditions and environments and capable
oversubscribed by more than $30bn combined, of handling the most challenging client drilling
allowing the companies to tighten pricing. programmes” and seven offshore units that
Meanwhile, Aramco raised $6bn via its first include heavy-duty jack-ups “outfitted with high
dollar-denominated sukuk, selling bonds in specification equipment and capable of drilling
three tranches and attracting orders with a com- in 75 metres of water”.
bined value of more than $60bn to surpass the It also owns a self-propelled Multi-Purpose
reported sukuk target of $5bn. The funds are Service Vessel (MPSV) which is used for well
likely to be used in part to cover a portion of Ara- intervention and well testing services.
mco’s $18.75bn quarterly dividend payments. A potential listing is seen being made on the
Tadawul stock exchange in Riyadh before the
Trend end of the year, though the sources noted that no
ADNOC Drilling appears set to be followed final decision has yet been taken.™

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