Shell Partners With ADES for Major Offshore Drilling Contract

Shell plc SHEL, a global leader in the energy sector, continues to strengthen its foothold in Southeast Asia through strategic partnerships and significant operational moves. One of the most recent developments comes from ADES International Holding, a subsidiary of ADES Holding Company, which is part of the Saudi Arabia-based ADES Group. In a notable achievement, ADES has secured a key offshore drilling contract with Brunei Shell Petroleum (“BSP”), a joint venture between the Brunei government and Shell, a UK-London-based integrated oil and gas company.

This partnership signals a major milestone in ADES' growing presence in the region, as it embarks on an important offshore drilling project in Brunei.

Offshore Drilling Assignment: A Strategic Move for ADES

The latest contract awarded to ADES comes with an estimated value of approximately SAR 236 million (around $63 million) and involves the deployment of its Compact Driller standard jack-up rig. This rig will perform plug and abandonment (P&A) operations offshore Brunei, showcasing ADES' strong capabilities in the field of offshore drilling. The jack-up rig is set to begin operations in late 2026, a project that will be vital for BSP’s ongoing offshore development.

This contract is particularly significant as it marks the first award following ADES’ merger with Shelf Drilling, a UAE-based rig owner. The newly acquired subsidiary, Shelf Drilling, will play a critical role in the success of this contract, leveraging its extensive experience in offshore drilling operations across Southeast Asia. ADES' ability to secure this contract shortly after the merger highlights its integrated approach and operational strength.

Enhancing Operational Capabilities With Shelf Drilling

Through its wholly owned subsidiary, Shelf Drilling, ADES is now in a position to offer enhanced capabilities in the offshore drilling market. Shelf Drilling has a well-established track record in delivering high-quality drilling services, especially in plug and abandonment operations. These services are crucial for ensuring the safe and efficient decommissioning of offshore wells, a process that requires significant expertise and precision. The selection of the Compact Driller rig for this project further demonstrates ADES’ commitment to providing reliable, state-of-the-art technology to meet the complex demands of the offshore oil and gas industry.

Dr. Mohamed Farouk, CEO of ADES, commented on the deal, expressing confidence in the long-term potential of the Southeast Asia market. Dr. Farouk emphasized that the award not only solidifies ADES’ presence in the region but also strengthens its position as a key player in the global offshore drilling industry. This deal is an affirmation of ADES’ strategic vision, with an eye toward sustainable growth in regions with promising opportunities.

Brunei Shell Petroleum and the Growing Role of Southeast Asia in Global Energy Markets

Brunei Shell Petroleum, a joint venture between Shell and the Brunei government, plays a critical role in the development of the country’s oil and gas resources. The company is responsible for the exploration, production and management of the nation’s vast offshore oil fields. As global energy markets continue to evolve, Southeast Asia remains a key region for exploration and production activities, especially in offshore oil and gas operations.

For ADES, securing this contract with BSP offers an invaluable opportunity to deepen its relationship with one of the leading energy companies in the region. The strategic partnership between ADES and BSP also highlights the growing role of collaboration between international energy giants and local operators to meet the rising demand for energy production in Asia.

Looking Ahead: ADES' Commitment to Excellence in Offshore Operations

The jack-up rig contracted for offshore Brunei operations will undergo contract preparation activities in Singapore before it begins in the fourth quarter of 2026. Currently, the rig is contracted for operations in India until May 2026, further emphasizing its versatility and capacity to serve multiple regions. The commitment to safety, operational excellence and the ability to meet client expectations remains at the forefront of ADES' business strategy.

Dr. Farouk expressed optimism about the future, highlighting the significance of ADES’ new partnership with BSP. He emphasized ADES’ commitment to safe and efficient operations in Brunei, marking the beginning of a new phase of expansion for it in Southeast Asia and beyond. The recent merger with Shelf Drilling has strengthened ADES’ position in the offshore drilling market, solidifying its reputation for delivering high-quality services that meet the evolving demands of the global oil-energy sector.

In conclusion, this contract is a significant development for ADES, Shelf Drilling and Brunei Shell Petroleum. It is a testament to ADES' ability to execute large-scale offshore drilling operations with precision and safety. As the energy sector in Southeast Asia continues to grow, ADES' strategic vision and dedication to operational excellence will ensure its continued success in the region for years to come.

SHEL's Zacks Rank & Key Picks

Currently, SHEL has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like USA Compression Partners USAC, Oceaneering International OII and Canadian Natural Resources Limited CNQ, which sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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