Houston-based oil field services giant Halliburton reached a deal with Saudi Arabia’s state-owned oil company, Saudi Aramco, to expand gas production as the country seeks to diversify away from its heavy reliance on oil.
Saudi Aramco announced that the pair had signed what is known as the “Unconventional Gas Stimulation Services” contract over the weekend, under which Halliburton will help the country with its shale program as the kingdom seeks to both support its growing chemicals industry and offset local crude burning.
Saudi Aramco said in a statement that it has made “great strides” in developing its unconventional resources program, singling out unconventional gas “as an important clean energy source for the Kingdom’s future.”
While Saudi Arabia is the world’s largest oil exporter, Halliburton has been a leader in the U.S. shale boom and has the drilling and fracking knowledge and technology to help the country tap into its domestic gas resources.
Halliburton said in a statement that it will provide project management, testing services, wireline, tools and hydraulic fracturing at three different sites across the kingdom.
The contract is for three years, although the companies did not detail many of the terms, including the value of the deal.
Work on the project is scheduled to begin in June.
The deal to help Saudi Arabia boost its shale production comes as the country is implementing a sweeping initiative, known as Vision 2030, to modernize its economy. The plan involves transferring 5% of state-owned Saudi Aramco to the investment fund through an initial public offering, expected to be the largest in history.
Attracting foreign investment is a crucial piece of the policy.
The Saudis have essentially been forced into rethinking their economic organization due to the uncertain future of the underground oil market.