(Yicai Global) Nov. 5 -- A wholly-owned unit of Beijing-based Sinopec Oilfield Service has signed a USD400 million supply contract with the Saudi Arabian Oil Company.
Sinopec International Petroleum Service agreed to supply six unconventional gas well rigs to the Dhahran, Saudi Arabia-based petroleum giant better known as Saudi Aramco in a daily-rate contract of three years' duration, its parent company announced yesterday. The contract value is equal to almost 5 percent of the Chinese firm's business revenue last year.
Aramco is scrambling to exploit shale gas in oil-rich eastern Saudi Arabia by fracking -- injecting high-pressure liquid into underground rocks to force open fissures to access petroleum deposits within. "We are looking to take our unconventional gas within the next 10 years to 3 billion standard cubic feet a day of sales gas," Aramco Chief Executive Officer Amin Nasser told media in Saudi Arabia on April 28. The company now produces 190 million-plus cubic feet of unconventional gas each day.
The transaction will further enhance Sinopec Oilfield Service's status as Aramco's largest provider of land-based drilling rigs and expand the application of fracking equipment in Saudi Arabia, as well as enlarging the Chinese firm's service scope in this market, the statement added.
The company is China's biggest provider of integrated oil and gas engineering and technical services and its controlling shareholder is state-backed oil behemoth Sinopec Group, the world's biggest petrochemical conglomerate.
SOS logged business revenue of about CNY21.5 billion (USD3 billion) in the first three quarters in an annual rise of about 16.5 percent. Its net profit attributable to shareholders was CNY886 million (USD123 million), surging by around 38 percent on the year.
Fracking is a controversial practice several countries, including the UK, France and Tunisia, have banned on environmental grounds. Several US states and the Canadian province of Quebec also outlaw it.
Editor: Ben Armour