A consortium led by Saudi-listed ADES Holding Company has signed a service contract agreement with the state-owned Egyptian General Petroleum Corporation (EGPC) to operate and boost production in the SUCO and OSOCO brownfields in Egypt.

The new award has a 10-year tenor, which can be extended for another 10 years, ADES said in a statement to the Saudi Stock Exchange on Wednesday.

The consortium will aim to increase incremental production levels, surpassing the current baseline production at the two brownfields.

While adopting an efficient asset-light model, the project will minimise initial capital outflow, with the majority being an operational expenditure (OPEX) related.

The consortium will be reimbursed with most of the OPEX incurred during baseline production and is entitled to incremental production returns based on a mutually agreed formula with EGPC.

The contract’s financial impact will begin to reflect on the company’s earnings by 2025, with an estimated 5% contribution to EBITDA generated from ADES’ Egypt operations, the statement added.

ADES has a fleet of 87 rigs across seven countries in the MENA region and India, including 38 onshore drilling rigs, 46 jackup offshore drilling rigs, two jackup barges, and one mobile offshore production unit.

(Editing by Seban Scaria seban.scaria@lseg.com )