Saudi Aramco and National Oilwell Varco, Inc. (NYSE: NOV) have signed a shareholder agreement to form a joint venture partnership. The JV is to establish an integrated world-class on-shore rig and equipment manufacturing and aftermarket facility in Ras Al-Khair, Saudi Arabia.
NOV will own a 70% interest in the joint venture, while Saudi Aramco will own 30%.
Deals such as these are to “accelerate economic diversification as part of Vision 2030” for Saudi Arabia, said Amin Nasser, Saudi Aramco’s president and CEO.
The manufacturing facility will have the capacity to produce 10 rigs per year and will offer repair services and recertification for a large portfolio of equipment. It will additionally be capable of supplying drilling packages for offshore Jack-up rigs.
The project is expected to generate over 1,000 direct and indirect jobs for Saudi Arabia with expected commissioning of the facility by 2020 and the first delivery of rigs to come in 2021.
Additionally, the companies announced their proposed joint venture will establish an education center to train Saudi technicians in the maintenance and operation of the sophisticated drilling technology that the venture will bring to the Kingdom.
“The new manufacturing facility will further strengthen the integrated portfolio of oil field services and equipment being developed by the Saudi Aramco Development Company, which also optimizes Saudi Aramco’s supply chain costs and improves its agility,” said Ziad Al-Murshed, the executive director of new business development at Saudi Aramco.
