Mohamed Farouk,CEO and Vice Chairman ofADES Holding Co.
ADES Holding Co.’s contract in Nigeria is structured as a breakeven (BBC) lease agreement, a common contracting model in the drilling sector that allows the company to minimize operational costs, the CEO and Vice Chairman Mohamed Farouk told Argaam. 
The contract is valued at approximately SAR 81.8 million, which is part of the comprehensive agreement between Britannia-U (the primary client) and Valiant Offshore Contractors Limited (in-country partner), where the full daily rental rate is apportioned so that Addis receives $57,000 per day directly, while the remaining amount is allocated to Valiant to cover operational expenses.
Farouk emphasized that the rental price directly translated to significant earnings before interest, taxes, depreciation, and amortization (EBITDA) and overall profitability, comparable to or potentially exceeding the company’s performance within the Kingdom. This highlighted ADES’s ability to maintain profitable operations in diverse markets.
ADES is enthusiastic about embarking upon this expansion into Nigeria, a nation endowed with considerable potential within the oil and gas sector. This expansion aligns with the strong expectation of increased demand for drilling rigs in the forthcoming years, particularly within the offshore drilling rig sector.
This partnership is a strategic step to jointly manage operations and ensure the success of ADES’s entry into the market, he highlighted, pointing out the importance of picking the optimal operational structure to effectively address the challenges in this new market.
Mohamed Farouk,CEO and Vice Chairman ofADES Holding Co.
ADES Holding Co.’s contract in Nigeria is structured as a breakeven (BBC) lease agreement, a common contracting model in the drilling sector that allows the company to minimize operational costs, the CEO and Vice Chairman Mohamed Farouk told Argaam.
The contract is valued at approximately SAR 81.8 million, which is part of the comprehensive agreement between Britannia-U (the primary client) and Valiant Offshore Contractors Limited (in-country partner), where the full daily rental rate is apportioned so that Addis receives $57,000 per day directly, while the remaining amount is allocated to Valiant to cover operational expenses.
Farouk emphasized that the rental price directly translated to significant earnings before interest, taxes, depreciation, and amortization (EBITDA) and overall profitability, comparable to or potentially exceeding the company’s performance within the Kingdom. This highlighted ADES’s ability to maintain profitable operations in diverse markets.
ADES is enthusiastic about embarking upon this expansion into Nigeria, a nation endowed with considerable potential within the oil and gas sector. This expansion aligns with the strong expectation of increased demand for drilling rigs in the forthcoming years, particularly within the offshore drilling rig sector.
This partnership is a strategic step to jointly manage operations and ensure the success of ADES’s entry into the market, he highlighted, pointing out the importance of picking the optimal operational structure to effectively address the challenges in this new market.
