Aramco selects contractors for five-year energy plan

02 May 2008
Companies to compete exclusively for billions of dollars worth of projects.

Saudi Aramco has drawn up a shortlist of 27 local and inter-national engineering and construction contractors to compete exclusively for billions of dollars worth of energy projects over the next five years.

Aramco has submitted the list of general engineering services (GES) contractors to the Petroleum & Mineral Resources Ministry for approval. The decision will then need to be endorsed by the country’s Supreme Petroleum Council before it comes into effect.

The oil giant has had lists of preferred suppliers in the past, but has now widened the remit of work for which contractors on the list can bid. It has included project management consultancy (PMC) work for the first time, in addition to general engineering and construction services.

The list includes some of the largest international engineering, procurement and construction (EPC) companies, and some of the biggest local conglomerates. All have been lured by the five-year access to deals.

Aramco is expected to spend more than $90bn on projects and infrastructure between now and 2012. It has drawn up the list to ensure it has access to enough engineering and contractor capacity.

However, no Japanese or South Korean firms have been included on the shortlist, despite becoming a much more significant presence in the market in recent months.

Most of the 16 local companies that have been shortlisted have signed up international partners to jointly work on projects in the kingdom.

Several international firms have signed agreements with local companies over the past year, partly to help make it on to Aramco’s list of contractors.

Arabian Consulting Engineering Centre (ACEC) has teamed up with Norway’s Aker Kvaerner.

The US’ Jacobs Engineering bought a 60 per cent stake in the local Zamel & Turbag Consulting Engineers in March as part of a push to boost its engineering and construction management revenues in the kingdom.

Other firms such as the UK’s Amec, which operates in the kingdom through its local subsidiary King Wilkinson, have been dropped from the list.

An executive from one of the companies on the shortlist says Aramco is looking for more co-operation between the 16 local firms.

“Rather than 16 companies all competing head to head for contracts, Aramco would like them to pair up to get work done more efficiently,” he says.

However, the executive says many firms in the kingdom are already overstretched.

“We all want to support Aramco with this initiative but there is no certainty we will all have the resources to compete,” he warns.

Table: Aramco's shortlist of general engineering services contractors

Saudi CompanyInternational Partner
Arabian Consulting Engineering CentreAker Kvaerner (Norway)
Abdulhadi & Al-Moaibed Consulting Engineering CompanyKBR (US)
Dar al-Riyadh ConsultantsParsons (US)
Flour ArabiaFlour (US)
Al-Hejailan Consultants-
Petrocon ArabiaWorleyParsons (Australia)
Radicon/PI Consult ConsortiumKentz Corporation (UK), HLW International (US)
Saudi Arabian BechtelBechtel (US)
Saudi Consulting ServicesSNC-Lavalin (Canada)
Saudi Consulting & Design OfficeLarsen & Toubro (India)
Saudi Consolidated Engineering Company-
Al-Saihata, Al-Fattani & Al-Othman Engineering CompanyFoster Wheeler (US), Stone & Webster (US)
Jacobs, Zamel and Turbag Consulting EngineersJacobs Engineering Group (US)
Zuhair Fayez Partnership Consultants-
Abdul Rahman Rabia & Partners-
Abdul Aziz Kamel Engineering-

Source: MEED

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