Houston-based Halliburton Co. has inked a contract to help Saudi Arabia develop the country’s unconventional natural gas.
Senior executives of state-owned Saudi Arabian Oil Co., i.e. Saudi Aramco, and Halliburton signed the agreement on Sunday for work to begin in June. The contract is for two years with the option for a one-year extension. No financial details were disclosed.
Saudi Arabia is the world’s largest oil exporter and it leads the Organization of the Petroleum Exporting Countries. However, the country also has huge gas reserves, much of it in shale and tight resources.
Halliburton is the No. 1 hydraulic fracturing company in North America.
“As a leader in unconventional resource development, we believe Halliburton will work best with Saudi Aramco to help in our pursuit of unconventional gas to serve domestic needs, offset local crude burning, provide feedstock for chemical industry development, and spur regional economic development in line with Vision 2030, the Kingdom’s national transformation program,” said Aramco’s Mohammed Y. Qahtani, senior vice president of upstream.
Vision 2030 is a modernization plan underway to open the country’s energy sector to foreign investment and eventually take Aramco public.
Aramco’s unconventional resource development program is focused on three areas: Northern Kingdom, South Ghawar, Jafurah and Rub’ Al-Khali.
Halliburton CEO Jeff Miller called the agreement a “great opportunity to provide a tailored application of Halliburton technology, logistics management and operational excellence to maximize Saudi Aramco’s asset value and deliver optimal recovery.”
Halliburton plans to use an integrated approach to support Aramco’s increased recovery and to meet production targets by providing project management, hydraulic fracturing, coiled tubing, wireline/perforating, completion tools and testing services.
“This contract includes a strong component to support our In Kingdom Total Value Add Program as developing Saudi labor force and developing and utilizing local suppliers is vital to the success of this project,” Qahtani said.
The Saudis are diversifying worldwide and in particular along the Texas coast through Aramco and Saudi Basic Industries Corp., aka SABIC, which agreed last year to develop with ExxonMobil Corp. a world-class ethane steam cracker on the South Texas coast near Corpus Christi.
Late last year Aramco signaled that it was interested in making investments outside the kingdom, and reportedly had inquired about purchasing unconventional assets in the Permian Basin and the Eagle Ford Shale.
Aramco also reportedly has discussed with Houston’s Tellurian Inc. about acquiring a stake or purchasing natural gas from a flurry of projects underway in Louisiana and Texas.
Aramco already has substantial Texas investments underway from Corpus Christi to the Golden Triangle complex east of Houston in the Beaumont/Port Arthur area.
Aramco-owned Motiva Enterprises, headquartered in Houston, operates North America’s largest refinery in Port Arthur, with crude capacity of 630,000 b/d.
In April Motiva secured two agreements that represent billions in potential investments to take advantage of growing U.S. natural gas and oil feedstocks. Memorandums of understanding were signed with TechnipFMC and Honeywell UOP to study at least two petrochemical projects.
Aramco in March also clinched commercial oil and gas partnerships with 14 U.S. energy companies, including Halliburton, and with other global operators that combined are worth $10 billion-plus.
The dealmaking followed transactions secured by Aramco last year during President Trump’s trip to the Middle East and Europe. Contracts secured at that time, which included U.S defense and healthcare industries, were worth an estimated $50 billion.