The Middle East and North Africa (MENA) is undergoing mass transformations in the oil industry. Recent events have seen Saudi Arabia`s Industrialisation and Energy Services Company - TAQA acquire onshore drilling rigs throughout MENA which were previously owned by Schlumberger. This large operation sees the acquisition of rigs from Kuwait, Oman, Pakistan and Iraq, and amounts to a significant $415 million. TAQA believes this acquisition aligns with the core ethos of Saudi`s 2030 vision, envisaging economic and infrastructural growth. Saudi Arabia have much depended on oil that practically fuels its economy, this acquisition will bring a more robust and stable outlook to the country with hope to generate further income and achieve prosperity.
TAQA`s triumphant acquisition, instigated via their drilling subsidiary Arabian Drilling Company (ADC), will seek to operate a fleet of 58 onshore rigs and 9 offshore rigs across MENA. This investment in growth will generate steady income for the country and provide employment opportunities for an estimate of 6,000 employees across the firm. This acquisition is in respect to TAQA`s 2021 strategy of becoming a leading regional oilfield services and equipment company. This pan-regional drilling powerhouse will unlock value and drive growth in Saudi Arabia. Their growth-driven strategy is reflected in 3 pillars:
- To create value through expanding into new markets and strengthening their current position,
- Maintain current value via keeping up-to-date and current with new technologies and by providing optimum services for their clients,
- Striving for efficiency in relation to safety, reliability and competiveness.
TAQA`s values are aligned with Saudi`s 2030 vision which bolsters the country`s position of achieving their vision.
"This acquisition is fully aligned with Saudi Vision 2030. It unlocks value and drives growth across our entire value chain through a more integrated regional approach, while positioning a leading Saudi company as a global player. The transaction also follows on from ADC`s accelerated expansion activity in 2018 when 16 rigs were commissioned to support the growth of Saudi Aramco. This new combination clearly demonstrates that TAQA and ADC are delivering on their transformation and growth strategies, and further strengthens what is already a long-standing and trusted partnership between TAQA and Schlumberger. We look forward to supporting ADC in the next phase of its expansion and have full confidence that this will benefit all stakeholders, most notably our regional clients." - Azzam Shalabi, CEO, TAQA and chairman of the ADC board
This much awaited acquisition is set to take place in the second half of 2019, post-regulatory approvals, and will aim to generate revenue, employment opportunities and sustainability. ADC has recently undergone other expansions from as early as 2018 where the company saw an increase in 16 rigs to support the growth of Saudi Aramco. It is evident that ADC, subsidiary to TAQA, is taking an accelerated, progressive and prosperous path. ADC traditionally has a history of innovation, efficiency and safety throughout its 55 years of operations.
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Acquisitions and mergers require meticulous due diligence research to make sure you mitigate any potential risks. No matter the size of the merger, if counterparties are not investigated correctly and thoroughly the effects could be costly on your business. Cedar Rose specialises in business intelligence, such as due diligence investigations, especially throughout the MENA region. Know the company and individuals (such as directors and shareholders) you are dealing with beforehand, be aware of their associations to other entities or organisations, ensure all paperwork is in order and remain compliant. Contact our Client Services team on email@example.com with your particular requirements.
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*** The sole purpose of the article above is to generate public discussion, it has no intention to constitute legal advice. ***