In recent years, Saudi Aramco has emerged as the region’s biggest client in the oil and gas sector. In 2010, the oil major is also emerging as a major force in the construction sector, with a number of large contracts having been awarded for prestige construction projects.
In May, the state-oil company selected the local Saudi Oger to build its estimated SR2bn ($533m) King Abdulaziz Centre for Knowledge & Culture in the country’s Eastern Province.
In the same month Aramco awarded South Korea’s SK Engineering & Construction the estimated SR1.9bn ($506m) contract to build the residential buildings for the King Abdullah Petroleum Studies Research Centre (Kapsarc) in Riyadh.
Aramco’s increasing role in the kingdom’s construction market looks set to continue with a number of large projects currently being tendered.
A 2 October deadline has been set for the contract to build the commercial facilities and library at the Kapsarc development. Aramco has also recently received prequalification documents for the contract to build a 60,000 seat stadium and four other construction packages at its $10bn King Abdullah Sports City development near Jeddah.
With the effects of the global recession still being felt throughout the region’s construction sector, many developers have been forced to cancel extravagant projects planned during the boom. But with Saudi’s oil production rate of 8 million barrels a day, the state-owned company has plenty of capital to pump into these prestige developments.
The increasing role of the oil company in the kingdom’s construction sector will please the large international construction companies. With the rest of the Gulf still suffering from the economic downturn, the kingdom is set to continue to offer contractors exciting opportunities over the next few years.