Aramco signs $27.5bn of equipment supply deals

29 November 2018
The deals are part of Aramco's In-Kingdom Total Value Add (IKTVA) programme

State oil giant Saudi Aramco signed $27.5bn worth of contracts with 31 companies on 26 November as part of its In-Kingdom Total Value Add (IKTVA) programme, which seeks to increase the local content of its operations.

Launched in late-2015, the IKTVA programme aims to build a more efficient supply chain and increase Saudi Arabia’s local content generation to 70 per cent by end of 2021, by getting its suppliers across the value chain to commit to its localisation goals.

The companies in turn can take advantage of Aramco’s plans to spend around $400bn on localisation opportunities over the next decade. Aramco hopes the programme will create thousands of jobs as the kingdom seeks to diversify its economy away from a heavy dependence on oil export revenues.

The deals were signed at Aramco’s flagship IKTVA Forum in Dammam.

“We signed $27.5bn in a total of 31 commercial collaborations. Companies that have invested here are ideally positioned to benefit further with our signing last month of SR125bn [$33.33bn] in business at the Future Investment Initiative in Riyadh, much of which will have a direct impact on IKTVA,” Aramco CEO Amin Nasser said in a statement.

“As of now, 51 percent of each riyal Saudi Aramco earmarks for materials and services is spent locally,” he added.

The agreements include the following companies:

  • Sapura Fabrication (Malaysia)
  • National Petroleum Construction Company (UAE)
  • Baker Hughes (US)
  • Schlumberger (US)
  • Siemens (Germany)
  • PowerChina
  • ABB (Switzerland)
  • Yokogawa (Japan)
  • Schneider Electric Company
  • Honeywell (US)
  • Emerson (US)
  • Weir Group (Germany)
  • TechnipFMC (France)
  • Noble (US)
  • Larsen & Toubro (India)

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