On March 18, China Offshore Oil Engineering Co., Ltd. (hereinafter referred to as “COOEC”) issued the “Announcement on Providing Parent Company Guarantee for Saudi Arabian Subsidiary”.
The announcement disclosed that COOEC has added RMB 3.5 billion (approximately $720 million) in guarantees for its wholly-owned subsidiary Offshore Oil Engineering Arabia Limited. The guarantee amount is valid from the date of approval by the shareholders’ meeting to December 31, 2027, and the guarantee period is from the date of issuance of the guarantee to the date when all order obligations under the LTA contract of the Saudi subsidiary are actually fulfilled.
According to previous reports, in February this year, COOEC has successfully renewed the Saudi Aramco LTA contract. LTA is a long-term cooperation agreement signed between Saudi Aramco and its partners. In 2018, COOEC signed the LTA agreement with Saudi Aramco for the first time, becoming the only Chinese company on the shortlist of Saudi Aramco’s offshore general contractor LTA contractors.
COOEC shall, upon the request of Saudi Aramco, provide a parent company guarantee to the Owner and assume joint and several liability guarantee for each specific business order obtained by Offshore Oil Engineering Arabia under the LTA Contract.
According to the announcement, in order to guarantee Offshore Oil Engineering Arabia to successfully undertake and execute the business orders under the LTA Contract, taking into account the contracted orders and future business development of the company, a new parent company guarantee amount of RMB3.5 billion has been added, which can be utilized in a rolling manner within the validity period. The specific term of each parent company guarantee will be determined according to the actual business orders.