ADES CEO expects investments to reach SAR 5.5B in 2 years

Logo of ADES Holding Co.

ADES Holding Co.’s liquidity amounts to SAR 750 million, CEO Mohamed Farouk said, expecting investments to reach DAR 5.5 billion over the next two years.

In an interview with CNBC Arabia, Farouk explained that the company has a conservative loan policy that ensures any contract covers the loan value and generates high profits for shareholders by increasing contract-secured debt.

He went on to say that the company is preparing to secure a risk-free loan.

Farouk added that the Saudi market is large and dynamic, constantly prompting changes in strategic plans, and noted its potential, especially in offshore gas, which aligns with the company’s goals.

The CEO also emphasized the Qatari market's importance for the company, especially in gas exploration and oil extraction.

ADES had three drilling rigs in Qatar, covering 15% of the market share. One rig was moved to Indonesia, and the contract signing helps maintain its market share.

Farouk predicted a production increase in Qatar, prompting the company to plan doubling its rigs from three to six due to favorable market conditions and regional establishment, giving it a competitive advantage.

He cited Southeast Asia as another promising market due to a global shortage of drilling rigs. The company owns 49 rigs, allowing for market entry, increased production, and exploration, especially as some countries face energy import shortages.

The company, Farouk added, owns three rigs in India and two each in Thailand and Indonesia, set to start operations in the second half of 2024. Plans are in place to double these rigs to ten within two years.

Regarding the Egyptian market, Farouk said that the company has been present since 2012, easing handling of difficult conditions and exchange rate fluctuations. All company labor and expenses are local, making them less impacted by price fluctuations.

ADES’ business volume in Egypt was about SAR 500 million as per the last balance sheet, Farouk added, noting significantly reduced risks compared to the past six months due to cost-cutting and increased revenues.

ADES Holding recently signed a SAR 350 million contract with TotalEnergies in Qatar for an offshore drilling rig.

It also received a direct award from Suez Oil Co. in Egypt on May 2, 2024, for a SAR 161 million offshore rig contract.

The new contracts in Thailand, Qatar, and Egypt increase the total reactivated offshore rigs to three out of five previously suspended rigs in the kingdom.