ADNOC Drilling buys into SLB's Oman and Kuwait rig business
ADNOC Drilling will acquire a 70% stake in oil services firm SLB's onshore rig business in Oman and Kuwait for up to $112 million, creating a joint venture it seeks to double in the next year, its chief financial officer said on Thursday.
The acquisition, expected to close in the first quarter of 2026, will give ADNOC Drilling - a unit of Abu Dhabi state oil major ADNOC - access to eight operational onshore drilling rigs, six in Oman and two in Kuwait.
"So we have things in the pipeline that will potentially at least double that existing, initial eight rigs footprint," ADNOC Drilling CFO Youssef Salem told Reuters.
ADNOC Drilling will pay $91 million for the stake, with another $21 million payout to SLB linked to business performance, Salem said.
The current oil price and macroeconomic environment "put pressure on valuations and multiples globally ... and reduces the pool of potential buyers for such assets, generally, and hence presents a competitive advantage, especially for a cash buyer," he said.
The transaction will be financed by drawing from a $1 billion revolving loan that ADNOC Drilling has with a group of regional and international banks. The loan matures in the fourth quarter and will be refinanced before then, Salem said.
The deal will mark the first drilling operations outside the United Arab Emirates for the company, apart from a single rig in Jordan.
ADNOC Drilling's focus will be on growing its scale in Oman and Kuwait, through acquisitions as well as tenders, while also evaluating expansion into other markets, Salem said.
(Reporting by Yousef Saba; Editing by David Holmes)
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