A consortium headed by the Saudi-listed ADES Holding Company has inked a milestone service contract with the Egyptian General Petroleum Corporation (EGPC).

This agreement, announced on Wednesday, is focused on operating and enhancing production in Egypt’s SUCO and OSOCO brownfields.

Under this new deal, the consortium will engage in a decade-long endeavor to boost production levels in these fields, with an option to extend the contract for an additional ten years. According to ADES’ statement to the Saudi Stock Exchange, the primary objective is to significantly surpass the current production benchmarks at these sites.

The strategy for this project will revolve around an asset-light model, aiming to reduce initial capital expenditures. This approach ensures that most costs will be operational expenditures (OPEX), thereby minimizing upfront investment.

In a unique arrangement, the consortium will receive reimbursement for the majority of the OPEX incurred during the phase of baseline production. Moreover, it will also gain from the incremental production returns, following a formula agreed upon with the EGPC.

Financially, the impact of this contract is expected to be substantial for ADES, with projections indicating a 5% contribution to the EBITDA from the company’s operations in Egypt by 2025.

ADES boasts an impressive fleet, encompassing 87 rigs spread across seven countries in the MENA region and India. This includes a mix of 38 onshore drilling rigs, 46 jackup offshore drilling rigs, two jackup barges, and a mobile offshore production unit, highlighting the company’s robust presence in the industry.