Qatar Petroleum, GDI pen drilling contracts worth $1.4B

Gulf Drilling International Ltd. (GDI), a subsidiary of Gulf International Services (GIS), the largest oilfield service company in Qatar, officially signed four new contracts and four contract extensions with Qatar Petroleum (QP) for the provision of drilling rig services, each having a term of five years.

The new contracts have been concluded for the provision of two new offshore drilling rigs “Dukhan” and “Halul” and two new land rigs GDI-7 and GDI-8; while contract extensions allow the continuation of services performed by four land rigs GDI-1, GDI-2, GDI-3 and GDI-4. The awarding of these contracts was announced in previous reports.

The contracts were signed by His Excellency Dr. Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry and the Chairman and Managing Director of Qatar Petroleum, and Ibrahim J. Al-Othman, the Chief Executive Officer of GDI. It was attended by Saad Sherida Al Kaabi, Director of Oil & Gas Ventures at Qatar Petroleum.

The combined value of the new contracts and contract extensions, which were announced earlier by GDI, total QR5.2 billion. They represent the largest single GDI client commitment since it was established 10 years ago.

In comments at the signing ceremony, H.E. Dr. Mohammed Bin Saleh Al-Sada said: “The new contracts will allow continuing, as well as expanding, the important development work Qatar Petroleum is undertaking. Each of the contracted rigs is being customized to meet the best in class criteria specified by Qatar Petroleum.”

His Excellency praised the high quality of services provided by GDI, and the level of commitment and dedication it has demonstrated to achieve its challenging goals.

Ibrahim J. Al Othman, Chief Executive Officer of GDI took the opportunity to express gratitude and appreciation of H.E. Dr. Mohammad Bin Saleh Al Sada, the Minister of Energy and Industry, and the GDI Board of Directors for their continuous support and guidance.

Ibrahim J. Al Othman said: “GDI fully appreciates the value of the partnership that has been developed with Qatar Petroleum.”

He added: “These contracts will positively impact our revenue growth immediately which will positively reflect on our profitability for this year and the next five years Furthermore, the addition of a new offshore rig for QP “Halul” in 2016 will greatly support our long term revenue growth plans.”

By mid-2016, GDI will have a total of eighteen drilling rigs. In addition to one accommodation jack-up and two Liftboats.

The new offshore drilling rig “Halul” is currently being built to the proven Mod VB Bigfoot design, similar to the recently delivered jack-up drilling rig “Dukhan.”

These rigs are expected to be placed into service in Q-4 of 2014 and Q2 of 2016, respectively.

These offshore rigs will be the newest rigs in GDI’s fleet. Each rig will come complete with a centrifuge system for solids control, extra bulk hoppers on deck, 7,500 psi mud pumps, a 15,000 psi choke manifold, 150 man accommodation, 10,000 HP power packages, off-line building stands, and a 75 foot cantilever outreach.

The two new land rigs are currently under construction in the USA. GDI-7 will be a 1500HP rig while GDI-8 will be a 3000HP rig, making it the biggest land rig in GDI’s fleet. The bigger rig will provide GDI with the capability of drilling deeper wells and executing extended reach wells to a much greater depth.

The land rigs will also come with a number of ancillary assets that are required to support a land operation. Ancillary assets include water well rigs, mobile cranes, trucks and trailers. GDI’s onshore base camp, workshop, storage yards, warehouses and accommodation facilities are also being expanded to support the additional work. They are expected to be received and placed into service during the second half of 2015.

The four existing land rigs GDI-1, GDI-2, GDI-3 and GDI-4 are already working under contracts to QP and GDI will continue to utilize them at the highest operational standard.

GDI is also in the process of recruiting additional personnel and providing the necessary training, certification and orientation so that they can man and operate these rigs in a safe and efficient manner.