ADES Holding Expands into Brazil with $85.1 Million Charter Agreement

Saudi-based exploration service provider ADES Holding Co. has taken a significant step in its global expansion by entering the Brazilian market through an $85.1 million charter agreement. The deal, signed with Luxembourg’s Constellation Oil Services Holding, will facilitate a drilling contract with Petrobras, Brazil’s state-owned energy giant.

As part of the agreement, ADES will deploy its jackup rig, Admarine 511, to support Petrobras’ offshore drilling operations. The contract spans approximately 38 months, with an optional 472-day extension that could extend the total duration to 4.5 years. This move highlights ADES’ commitment to expanding its Latin American presence through strategic and alternative contracting models.

The Admarine 511 rig is currently undergoing preparations at the Arab Shipbuilding and Repair Yard in Bahrain. Drilling operations in Brazil are expected to commence in the fourth quarter of 2025, marking a major milestone for the company.

ADES CEO Mohamed Farouk expressed optimism about the expansion, stating, “We are excited to enter the Brazilian market through this strategic charter with Constellation to support Petrobras, Brazil’s national oil company.” He further emphasized that the agreement strengthens ADES’ global footprint while enhancing business sustainability by securing a long-term contract that bolsters the company’s backlog and provides better cash flow visibility.

According to ADES, the charter agreement is expected to contribute approximately SR319 million ($85.1 million) in additional backlog, inclusive of mobilization and demobilization fees. While Constellation will be responsible for operating the rig locally, the financial structure of the deal ensures that a majority of the revenue will contribute directly to ADES’ profitability.

Despite the positive expansion news, ADES’ share price experienced a minor dip following the announcement. As of 12:30 p.m. Saudi time, the company’s stock had declined by 1.23 percent to SR16.12 on the Saudi stock exchange.

The agreement follows a period of strong financial performance for ADES Holding in 2024, reflecting the company’s upward growth trajectory. ADES recorded an 80.54 percent increase in net profit, reaching SR816.19 million, compared to SR452.07 million in 2023. Revenue also saw a notable rise of 43.10 percent year-on-year, totaling SR6.19 billion, up from SR4.33 billion the previous year. Earnings per share increased to SR0.73 in 2024 from SR0.59 in 2023, demonstrating improved profitability and operational efficiency.

Farouk highlighted that ADES opted for the charter model to navigate Brazil’s operational complexities more effectively. “Recognizing the unique challenges of each market, ADES strategically chose a charter model that facilitates a seamless entry into Brazil while maximizing profitability and delivering higher returns for our shareholders,” he added.

With this expansion, ADES continues to position itself as a leading global player in offshore drilling, leveraging strategic partnerships and innovative business models to drive sustainable growth.