Saudi ADES Holding signs long-term agreement to invest $66M in Egyptian oil fields

Published on : 2024-03-31

Saudi ADES Holding Company has inked a lengthy agreement to inject $66 million into the oil fields operated by Suez Oil Company (SUCO) and Offshore Shukeir Oil Company Co (OSOCO), both under the umbrella of the Egyptian General Petroleum Corporation.

Under this arrangement, ADES intends to allocate USD 30 million (SAR 112.5 million) towards SUCO and USD 36 million (SAR 135 million) towards OSOCO within the initial three years, aiming to boost production. This initiative is part of a joint venture with a prominent local Exploration and Production (E&P) entity, geared towards optimizing production in key oil brownfields in Egypt.

The consortium endeavors to elevate production levels beyond the current baseline at the two brownfields through collaborative efforts, with ADES positioned to benefit from incremental production returns based on a mutually agreed formula.

The agreement spans a decade and is potentially extendable by another ten years, with investment allocations contingent upon the achieved levels of incremental production. The consortium's portion of incremental production will fluctuate between 61 percent and 72 percent, depending on total barrels produced and market-derived prices per barrel.

Commencement of operations is anticipated within 90 days, according to ADES. Specializing in international drilling services for the oil and gas sector, ADES boasts ownership of 87 drilling platforms across eight countries, comprising 38 land-based and 46 offshore platforms.

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