Saudi Aramco, the world’s top oil exporter, and the US-based Nabors Industries have signed an agreement to form a joint venture (JV) in the kingdom to operate onshore drilling rigs.

The JV, which will be equally owned by Aramco and Nabors, is expected to be operational in the second quarter of 2017. Under the agreement, the partners will own, manage and operate onshore drilling rigs, according to a statement from the American firm.

The new venture will leverage Nabors’ existing operations in Saudi Arabia, to focus on both existing and future onshore oil and gas fields. Aramco and Nabors will each contribute land rigs to the JV in the first years of operation along with capital commitments toward future onshore drilling rigs, which will be manufactured in Saudi Arabia.

The agreement is part of the kingdom’s commitment to developing a competitive energy sector, localise industry hubs in order to foster economic diversification and job creation. The JV is one of the anchor projects to support the wider development and localisation of industries such as rig and rig equipment manufacturing, casting and forging.

Nabors, which has maintained a presence in Saudi Arabia for decades, owns and operates one of the world’s largest land-based drilling rig fleets and offers offshore platform rigs in the US and several other markets.

Aramco, which plans to spend $334bn over the next decade across the oil and gas value chain, is also managing the development of a $5bn maritime complex in the Ras al-Khair area of the kingdom.

Firms are preparing to submit bids on 17 November for the estimated $800m marine engineering works for the complex. The other construction packages are expected to be tendered by December or early next year and could be awarded by May 2017, sources close to the scheme tell MEED.

The Ras al-Khair complex has components including onshore and offshore rig manufacturing facilities. For the forging and casting unit, Aramco has already signed a memorandum of understanding (MoU) with the US’ GE and Italy’s Cividale. GE and Cividale are investing more than $400m to construct a first of its kind facility that is set to be operational in 2020 and will create 2,000 jobs, according to a June press statement.

Aramco signed an agreement with the local National Shipping Company (Bahri), the UAE’s Lamprell Energy and South Korea’s Hyundai Heavy Industries, in January this year for maintenance, repair and overhaul (MRO) services. Aramco and Germany’s MAN have also signed an MoU to establish a vessel engine manufacturing facility in the marine complex, MEED reported on 2 November.