Aramco awards $7bn in contracts
Saudi Aramco has awarded contracts worth more than 26 billion Saudi riyals ($7bn) to 16 local companies in purchase agreements as part of a broader programme to increase the value of local content in its value chain, the company said on Saturday.
The world’s top oil exporter signed 10-year agreements with companies manufacturing pressure vessels, which are a critical component of oil and gas processes. The accords are in line with the kingdom’s Vision 2030 and National Transformation Programme, which seeks to strengthen its industrial and manufacturing capabilities.
The agreements will “expand the local industry’s capability and provide high quality supply of materials and services”, Abdulaziz Al Abdulkarim, Saudi Aramco vice president of procurement and supply chain management, said in a statement.
Aramco, which plans to float a 5 per cent stake in the company in the local as well as a foreign exchange, has a 10-year spending target of $414bn by 2025 as it looks to boost capacity and diversify into new products. It has also looked to boost local manufacturing capabilities, and
The new 10-year agreements were made with companies that manufacture pressure vessels
has as part of its In-Kingdom Total Value Add programme aimed to double the percentage of locally manufactured energy-related goods and services to 70 per cent of the total spend by 2021.
The companies awarded contracts are Al Zamil Process Equipment, Al Zamil Heavy Industries, Arabian CBI, Hesham Al Sewedy, Geyad Factory, Olayan Descon Engineering, Saudi Arabian Fabricated Metals, Gulf Steel Works, Bemco Steel Industries, Natco, Al-Rushaid Middle East, Al-Zamil Metal Works, Titanium & Steel Manufacturing Company, Petron Saudi Industrial Company, Inma Steel Oil and Gas and Gulf Sky Factory Company.
Aramco said it was expanding the requirements of its Iktva programme to include procurement of other strategic materials such as drilling equipment, process automation systems, line pipes, pumps and valves. The move comes amid a flurry of investment in drilling and well services, for which Aramco plans to plough in $134bn over the next ten years.
The company also plans to invest around $78bn in maintaining oil output potential over the same period.