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Opportunities in Gas and Oil Drilling: Saudi Arabia.

In Saudi Arabia, the foreign companies are not allowed to bid without joint venturing with a local partner or having a local agent. Therefore, the commercial registration of the drilling company is a must before starting its operation in Saudi Arabia. This procedure normally takes six months' time. Aramco, being the only oil company in Saudi Arabia, has the following procedure for bidding: 1. Pre-qualification Process: The drilling contractor has to approach Aramco for pre-qualification. The drilling contractor should have a good experience in drilling/workover and should have experienced personnel to run the operations. They must also have rigs with the right technical specification. 2. Tendering: The tender is always released to the qualified list of contractors. 3. Awarding The Tender: The tender is usually awarded to the contractor who qualifies on the following: Technical acceptance, manpower competence, and commercial competitiveness. 4. The contractor whose rigs are available in Saudi Arabia will have an advantage over other contractors since mobilisation cost will not be absorbed by Aramco and hence, the bid shall be more competitive than contractors with rigs available outside Saudi Arabia. 5. The duration of the primary contract is normally 3 years with one year extension option. The duration of the alternative contract is 2 years with 2 years extension option. 6. The downtime (like wait on cement, fishing) is usually charged at half the daily rate. However, if stoppage was due to the fault of the contractor, then there will be no payment. 7. There is no preference to any contractor over the other except for rig specs, experience, availability of personnel and lowest commercial bid. However, if the contractor succeeded in recruiting Saudi manpower, then there are special incentives. 8. The qualified drilling contractors with Aramco are the following:

- Arabian Drilling Company, ADC, which is a joint venture between the French Sedco Forex and Petromime.

- Pool Arabia, P or PA which is a JV between the American Pool Internatinal and Al Jaffali.

- Nadrico, NAD which is a JV between the American Nabors (previously Loffland) and Razayat (Mohammed Ali Reza).

- DST, which is a JV between the German Deutag and Al Olayan.

- Egyptian Drilling Co., DPS, which is controlled by Denmark's Maersk through a representative in Saudi Arabia.

- Santa Fe, SF, is a Kuwaiti company which is operating through a representative in Saudi Arabia.

- Noble which is a JV company with Al Rasheed but is idle in operations.
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Publication:APS Review Gas Market Trends
Geographic Code:7SAUD
Date:Oct 19, 1998
Previous Article:Opportunities In Oil & Gas Drilling In The GCC Region.
Next Article:Opportunities in Gas and Oil Drilling: Qatar.

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