Muscat – Abraj Energy Services Company, Oman’s leading provider of oil and gas services, has signed a Sharia-compliant financing facility agreement worth RO40mn with Alizz Islamic Bank.

Of this RO40mn Islamic financing facility, Abraj Energy Services will allocate RO30mn to finance its drilling rigs projects in Kuwait, while RO10mn will be used for non-funded working capital facilities for the company, as per a disclosure submitted to the Muscat Stock Exchange on Monday.

‘This financing is a result of the company’s continuous efforts to reduce its reliance on conventional debt and seek financing solutions that comply with Sharia law,’ Abraj Energy Services said in its disclosure.

Abraj Energy Services recently celebrated its success in achieving Sharia compliance as per the rules prescribed by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The announcement coincided with the company’s general assembly meeting held on March 28, 2024, following a series of initiatives and conscious steps taken to reduce conventional debt to less than 30% of the company’s market capitalisation.

Regarding its expansion plans, in February 2023, Abraj Energy Services had announced that it would add 11 new drilling rigs to its fleet over the next five years. The company had been awarded a contract in Kuwait for a fixed duration of five years, with an optional additional period of two years.

‘Under this [Kuwait] contract, the company will provide three drilling rigs for this project, set to commence in 2024. The new project will be added to the company’s operations record within drilling as well as well maintenance and services,’ Abraj Energy Services said in February 2023.

Abraj Energy Services has grown exponentially to become Oman’s leading drilling company, boasting one of the youngest and most advanced drilling fleets in the GCC region. The company has successfully diversified its service offerings in innovative drilling and well services operations and integrated project management services. It benefits from long-term contracts with prominent national and international exploration and production companies.

In 2023, Abraj Energy Services showcased positive financial performance, with total revenue reaching RO144.3mn, a 5.3% increase from the previous year, and net profit standing at RO16.6mn.