Valaris has announced its Saudi Arabia joint venture firm, ARO Drilling, has received a notice of suspension on a contract.
ARO received a notice of suspension from Aramco for one of its 19 contracted rigs, the Valaris 143 jack-up.
The rig’s contract was previously scheduled to end in December 2024, however, the suspension notice is for a period of up to twelve months and ARO is in discussions with Aramco to determine the effective date of the suspension.
During the period of suspension, ARO will have the right to terminate the drilling contract with Aramco, Valaris shared.
Valaris leases Valaris 143 to ARO under a bareboat charter agreement.
ARO Drilling has not been the only firm to be hit with a suspension notice from Aramco.
Borr Drilling received a suspension notice for the 400-ft Arabia I.
A further 4 Shelf Drilling jack-ups, 5 ADES jack-ups, 3 Arabian Drilling jack-ups and 4 COSL jack-ups have also been hit.
On top of these 18 jack-ups, there has been an indication that 3 Saipem jack-ups and 2 Egyptian Drilling jack-ups are also receiving suspension notices.
Aramco currently has 92 jack-ups either under contract or scheduled to begin work within the next few months.
Some drilling contractors, such as ARO, are in talks to determine when suspension periods will start with some suggesting that Aramco targeting a staggered approach to the suspensions.
Under this plan, some rigs will be suspended this month with other notices kicking in between now and the first quarter of 2025.
Recently, Aramco was awarded engineering, procurement and construction (EPC) contracts worth $7.7 billion for a major expansion of its Fadhili Gas Plant in the Eastern Province of Saudi Arabia.
The project is expected to increase the plant’s processing capacity from 2.5 to up to 4 billion standard cubic feet per day (bscfd).