WATCH: ARO Drilling and IMI hold naming ceremony for first of 20 planned newbuild jack-up rigs
ARO Drilling, a 50/50 joint venture between Valaris and Saudi Aramco, has held a naming ceremony, together with International Maritime Industries (IMI), for the first of 20 planned newbuild Saudi-operated and manufactured offshore jack-up rigs, which the offshore drilling player intends to add to its fleet over a ten-year period to meet Aramco’s drilling demands and plans.
Back in 2018, ARO Drilling agreed to supply Aramco with 20 new jack-ups over a ten-year period. International Maritime Industries (IMI), a joint venture between Saudi Aramco, Lamprell, Bahri and Hyundai Heavy Industries, is in charge of building the rigs, while a new design was developed in collaboration with GustoMSC and Lamprell.
The delivery of the first two, which was scheduled for 2022, slipped to 2023 after the delay in the completion of the new shipyard in Saudi Arabia. At the end of October 2023, ARO entered into a $359 million term loan with a syndicate of local Saudi Arabian banks to pay the remaining shipyard purchase price for the first two jack-ups and for general corporate purposes.
ARO Drilling and International Maritime Industries have now held the naming ceremony for the Kingdom 1 jack-up rig at the King Salman International Complex for Maritime Industries and Services, in Ras Al Khair.
The ceremony was witnessed by Nasser Al Nuaimi, Upstream president at Saudi Aramco; Ahmed Al Sa’adi, IMI Chairman of the Board of Directors; and Abdul Hameed Al Dughaither, ARO Drilling Chairman of the Board of Directors.
“ARO Drilling and International Maritime Industries are proud to present the naming ceremony of our groundbreaking offshore rig, Kingdom 1. This event marks a significant milestone for us,” said the offshore drilling player.
While introducing the Kingdom 1 rig, ARO Drilling described it as “an emblem of Saudi mastery,” which inaugurates a fleet of 20 fully Saudi-operated and manufactured offshore rigs, initiating “a positive shift in the industry.”
The Kingdom 1 jack-up rig is slated to start its initial eight-year contract with Aramco in the fourth quarter of 2023. On the other hand, the Kingdom 2 jack-up rig is scheduled to be delivered and begin its inaugural deal with Aramco in the first quarter of 2024.
The day rates for the initial eight-year contracts will be determined using a pricing mechanism that targets a six-year payback for construction costs on an EBITDA basis, followed by a minimum additional eight-year term, re-priced every three years, based on a market pricing mechanism.