SLB Secures Major 5-Year Contract from Aramco for Saudi Gas Push
Deal positions the energy services giant in Saudi Arabia's multi-billion dollar Jafurah unconventional gas project, a cornerstone of the Kingdom's Vision 2030.
Schlumberger (SLB) has been awarded a significant five-year contract by Saudi Aramco to provide stimulation services for unconventional gas production in Saudi Arabia, a move that deepens its strategic partnership with the state-owned oil giant and reinforces its foothold in the crucial Middle East market.
The agreement, announced Tuesday, tasks SLB with supporting production at the Jafurah unconventional gas field. This massive project is a central pillar of Saudi Arabia's Vision 2030 economic plan, which aims to diversify the nation's energy mix and significantly increase natural gas output to free up more crude oil for export.
While financial terms of the deal were not disclosed, the strategic value is substantial. The Jafurah field is the largest unconventional gas reservoir in the Kingdom and a key component of a program with an anticipated lifecycle investment exceeding $100 billion. Aramco's goal is to ramp up gas production to meet rising domestic demand and support its ambitions to become a major player in the global liquefied natural gas (LNG) market.
Under the contract, SLB will provide a suite of advanced technologies, including well stimulation services, intervention expertise, and cutting-edge digital solutions like frac automation. This highlights SLB's technical leadership in the increasingly complex field of unconventional resource extraction, which requires sophisticated engineering and digital optimization to be economically viable.
Market reaction to the news was muted, with SLB's shares trading nearly flat at $38.26 in Tuesday afternoon trading. The lack of immediate price movement reflects the undisclosed financial details of the contract. However, the deal provides enhanced long-term revenue visibility for SLB's Middle East operations, a region that is a significant contributor to its top line.
With a market capitalization of approximately $56.9 billion, SLB is a bellwether for the energy services sector. The company's stock has navigated a volatile year, trading between a high of $43.29 and a low of $30.37. Wall Street remains broadly positive on the company's prospects, with an average analyst target price around $46 and the vast majority of analysts holding a 'Buy' or 'Strong Buy' rating.
This contract builds on a long-standing, 85-year relationship between SLB and Saudi Arabia. The two companies have recently expanded their collaboration into future-facing energy systems, including digital sustainability platforms and carbon capture and storage projects. For SLB, securing a central role in a project of Jafurah's scale solidifies its competitive position against rivals Halliburton and Baker Hughes, demonstrating its value not just as a service provider but as a core technology partner in the world's most ambitious energy projects.
As Saudi Arabia pushes to boost its gas production capacity by as much as 60% by 2030, SLB's technological prowess and deep regional experience position it as a primary beneficiary of the Kingdom's massive capital investment cycle.