By Daniel Canty
The deal in Gulf Marine Services will see the firm capitalise on the industry's record growth.
Gulf Capital, a regional alternative investment firm, announced it has acquired a 50% stake in Gulf Marine Services (GMS), one of the largest jack-up barge and support vessel operating companies in the UAE, with presence throughout the Gulf.
"Gulf Capital has been actively targeting investments in the booming regional oil & gas industry. GMS is a recognised leading operator of jack-up barges in this fast-growing sector in the UAE and is well on its way to becoming the dominant player in the Gulf region," said Dr Karim El Solh, chief executive officer of Gulf Capital. "The GMS transaction is the latest in a string of acquisitions that allows Gulf Capital to capitalise on the unprecedented growth in the off-shore oil & gas sector."
The current and forecasted strong demand for oil and gas has put pressure on national and international oil companies to increase offshore exploration and production activities. It is estimated that US$55 billion will be invested in this sector in the Middle East over the next five years. This will lead to a significant increase in offshore drilling activities which will result in a surge in jack-up drilling rigs utilisation rates and daily rates to an all time high.
The increase in drilling activity will need to be complemented with an increase in well maintenance programmes to maintain production levels of existing wells. While oil-operating companies generally rely on drilling rigs to perform well intervention services, they are seeking more efficient and cost effective solutions to perform this work and reduce reliance on drilling rigs. The self-propelled jack-up service barges represent another option for performing these services, and can be operated at a fraction of the daily rates of drilling rigs. It is estimated that the demand for such barges will double over the next five years in the GCC region, and GMS claims to be well positioned to capitalise on this trend.
To develop its growth strategy, GMS required significant investments in capital and operational expenditures. GMS' shareholders decided that Gulf Capital, with its industry expertise and regional network, large capital and diversified investor base was the ideal partner to help the company achieve its ambitious targets.
"We are excited about the positive impact Gulf Capital will have on our growth prospects. Gulf Capital's investment is a strong demonstration of their confidence in our operation, strategy, and our future growth plans," said Abdullah Abdul Jalil Al Fahim, chairman of GMS.