Saudi Arabia turns to Halliburton for its fracking needs

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Saudi Arabia will partner with Houston-based Halliburton as it hopes to unlock a natural gas revolution similar to the shale boom that began in the U.S. more than a decade ago.

28 May 2018  | Jordan Blum  | Houston Chronicle via Energy Voice

State oil company Saudi Aramco signed a three-year contract Sunday with the North American fracking leader to handle the hydraulic fracturing and completions of its unconventional gas wells. Saudi Arabia hopes to rely much more on its domestic gas to power the Kingdom’s electric grid.

Whiles Saudi Arabia is known as the world’s largest oil exporter, it has vast supplies of gas as well, but much of it is difficult to recover from shale rock and tight sand. The goal is to use the unconventional drilling and fracking technologies developed in the U.S., especially in Texas, to tap into those gas resources.

The effort also is part of Saudi Arabia’s “Vision 2030” modernization plans to open Saudi’s energy sector to foreign investors, including taking Aramco public eventually, while diversifying globally, especially along the Texas Gulf Coast. Saudi Arabia is increasingly investing in Texas petrochemical plants and refineries from Corpus Christi to Port Arthur.

Halliburton is an American multinational corporation. One of the world’s largest oil field service companies, it has operations in more than 70 countries.

It owns hundreds of subsidiaries, affiliates, branches, brands, and divisions worldwide and employs approximately 50,000 people.

The company has dual headquarters located in Houston and in Dubai, where Chairman and CEO David Lesar works and resides.

The company remains incorporated in the United States.

Halliburton’s major business segment is the Energy Services Group (ESG). ESG provides technical products and services for petroleum and natural gas exploration and production.

Halliburton’s former subsidiary, KBR, is a major construction company of refineries, oil fields, pipelines, and chemical plants. Halliburton announced on April 5, 2007 that it had sold the division and severed its corporate relationship with KBR, which had been its contracting, engineering and construction unit as a part of the company.

The company has been involved in numerous controversies, including the Deepwater Horizon explosion, for which it agreed to settle outstanding legal claims against it by paying litigants $1.1 billion.

KBR, one of Halliburton’s subsidiaries at the time, paid bribes to high-ranking Nigerian officials between 1994 and 2004. Under a deal reached with the U.S. Justice Department, Halliburton has agreed to pay $382 million to settle the bribery case.

The deal comes just a month after Crown Prince Mohammed bin Salman, the heir to the Saudi throne, capped a three-week U.S. tour in Houston, where he underscored the Kingdom’s long-standing energy ties to the region.

Now, Halliburton is a bigger part of those overall plans.

“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 Mohammed Qahtani, Saudi Aramco’s senior vice president of upstream.

The contract includes a guaranteed two years with the option for a one-year extension. The companies declined to dollar figures or additional details about the deal for now.

“We are excited to apply our broad knowledge, efficiency and experience in unconventionals from Halliburton’s leadership position in North America to Saudi Arabia,” said Halliburton Chief Executive Jeff Miller, who traveled to Saudi Arabia for a signing ceremony. “This is 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.”

 

Original Link:  Saudi Arabia turns to Halliburton for its fracking needs

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