GDI signs five-year contract with Occidental Petroleum of Qatar valued at QR 830 million

DOHA, QATAR - Gulf International Services (“GIS” or “the group”; QE: GISS), the largest service group in Qatar, with interests in a broad cross-section of industries, ranging from insurance, re-insurance, fund management, onshore and offshore drilling, accommodation barge, helicopter transportation, and catering services confirmed that under the patronage of H.E. Dr Mohammed bin Saleh Al Sada, Minister of Energy and Industry, Gulf Drilling International (“GDI”), a joint venture of GIS, signed a new five-year contract with Occidental Petroleum of Qatar Ltd. (“Oxy Qatar”) for the jack-up drilling rig, Al-Wajba, to take effect on 1st January 2015, when the current contract expires.

The contract, valued at QR 830 million, was signed by Mr. Steve Kelly, President and General Manager of Oxy Qatar, and Mr. Ibrahim Jassim Al Othman, Chief Executive Officer of GDI.  It was attended by H.E. Dr Al Sada and Mr. Saad Sherida Al Kaabi, Director of Oil & Gas Ventures at Qatar Petroleum.

Al-Wajba first went to work for Oxy Qatar in 2008 and has remained continuously on contract to them since then.  In addition to Al-Wajba, GDI has two more rigs under contract to Oxy Qatar, making Oxy one of GDI’s most significant clients.

H.E. Dr Mohammed bin Saleh Al Sada, who is also the Chairman of GIS, congratulated GDI and Oxy Qatar for the signing of the agreement, which he described as a testament of GDI’s strength and reliability.

Dr. Al-Sada said, “The extension of this contract highlights GDI’s mission to become a world class drilling company with great emphasis on safety, operational efficiency, and high performance.”

Oxy took this opportunity to recognize GDI for the excellent safety record, operational performance and equipment reliability of its two jack-up drilling rigs currently in operation, Al-Rayyan and Al-Wajba.  Mr. Steve Kelly, President and General Manager of Oxy Qatar, said: “This is a proud moment for Oxy and for GDI and another testament to the commitment of both companies in their quest for excellence.  It is a tribute to the professionalism and dedication of GDI’s leadership and employees that we are able to recognize its achievements in this way.”

Mr. Kelly added: “The signing of this extended-term contract for the Al-Wajbadrilling rig will support our development plans over the next five to six years.  Oxy has made it a priority to support the establishment of GDI as a world-class drilling company.  Building this capability in-country is a key strategy of our partner Qatar Petroleum, and one that we support wholeheartedly.  We continue to demand the highest standards in safety and technical performance in order to implement our development plans successfully and meet the challenging goals we have set.”

Mr. Al Othman of GDI said: “We are pleased to sign a new contract for Al-Wajba with Oxy Qatar, which demonstrates the resilience of our strong working relationship.  For this achievement we are thankful to H.E. Dr. Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry, for his continuous support to GDI.”

Mr. Al Othman concluded by saying: “GDI’s relationship with Oxy Qatar has proven to be mutually beneficial as its rigs are being used for drilling and work-over of wells and in support of Oxy Qatar’s Minimum Facilities Platforms (MFP), which are fast track solutions that allow Oxy Qatar to rapidly expand capacity building of offshore platforms, thereby saving time and cost.  I am thankful to Oxy for having recognized our achievements and GDI is proud to partner with Oxy Qatar and to add value to their development plans.”

Over the last several years, GDI rigs have been used exclusively by Oxy for the development of the Idd El Shargi (North and South Domes) and Al Rayyan fields, located offshore Qatar.  Since the start of its drilling operations in Qatar in 1995, Oxy has considered the Al-Rayyan and Al-Wajba rigs to be among the best it has ever used.

The rigs have worked under an incentive system with a focus on proactive measures that historically have been shown to improve key areas of performance.  Meaningful, realistic targets are established and achievements in attaining those targets are rewarded.  The program in Qatar is notable for the complete buy-in of Oxy and GDI personnel in regard to achieving their targets and the “win-win” effect of providing stakeholders with the opportunity to be recognized for a job well done.  This program has contributed to a 40% reduction in well duration since the GDI-Oxy collaboration began in 2008.

GDI has adopted a strategy of securing long term contracts with clients to provide them with stability of cost and uninterrupted operations.  Continuity drives performance and safety standards, and permits innovative solutions that are more cost-effective.

GDI will nearly double the size of its total rig fleet as part of its business expansion plan.  By the end of 2015, GDI will have a total of 18 onshore and offshore drilling rigs (in just three years).  This will reflect positively on the strategic goals the company has set for itself.