- Project management firm will be set up by Saudi Aramco and international partners
- Venture will work overseas as well as on projects in kingdom
- Proposal will allow Aramco to focus on core hydrocarbons businesses
The new project management company planned by Saudi Aramco will work in foreign markets as well as Saudi Arabia.
According to sources close to the proposed venture, it will have an overseas remit in addition to its prime objective of delivering projects in the kingdom.
In Saudi Arabia, the company plans to target the SR600bn ($160bn) of government infrastructure projects over the next decade.
Aramco intends to form the company in partnership with up to five international project management firms. The new entity will then sell its services to other government bodies in Saudi Arabia that are developing infrastructure. It is estimated the potential workload totals about SR600bn, which would require about 15,000 staff to manage.
It is understood selected firms have been approached by Aramco to express interest in forming the new company. Many of the worlds leading project management providers have worked with Aramco in the past.
The project management company will take considerable strain away from Aramco, which in recent years has been relied upon to deliver some of the kingdoms biggest construction projects.
Aramco has not been mandated to do anything by Riyadh and the new plan is being viewed more as a study about how any new company might look, rather than a locked-in plan.
Sources close to Aramco have repeatedly said over recent years that these projects have diverted the oil companys attention away from its core hydrocarbons businesses. It is the worlds largest oil company and produces about 10.4 million barrels of oil a day.
Multibillion-dollar schemes include:
- King Abdullah University of Science & Technology (Kaust) near Jeddah,
- King Abdullah Sports City development near Jeddah,
- King Abdullah Petroleum Studies Research Centre (Kapsarc) in Riyadh, and
- King Abdulaziz Centre for Knowledge & Culture in the Eastern Province.
Most recently, Aramco was tasked with delivering 11 sports stadiums. Construction was due to start this year, although this plan is now being scaled back considerably.
Aramco has extensive experience in handling multibillion-dollar megaprojects and has worked closely with internationally renowned engineering consultancies for decades.
Several of the firms being approached by Aramco already have a long-term agreement in place with the oil major to provide engineering services, including project management, for hydrocarbon schemes across the kingdom.
The GES-plus was conceived to increase the amount of in-kingdom engineering talent and the success of the initiative is mixed. A shortage of local engineers has led to expatriates making up the numbers to meet national quotas in some cases, and many are bought in on expensive terms and conditions.
The new initiative is expected to be different and is more focused on the capability to push many of Riyadhs key initiatives through, rather than as a means to ramp up engineering and project management skills of locals.