Saudi Aramco ponders the imminent GES plus contracts. If all seven engineering firms sign, the kingdom will be overwhelmed with design work
Saudi Aramco is unique among the major national oil companies (NOC) in the Middle East.
Set up in the 1930s as a subsidiary of the US supermajor Chevron, Aramco has always had to tread a fine line between its own commercial interests and the interests of the kingdom.
When it became fully nationalised in 1980, Aramco was wise enough to retain many of the staff and commercial instincts that are found at successful international oil companies. As a result, Aramco is now the model of how a good state-owned organisation should be run.
With success comes responsibility, and Aramco is expected to lead from the front in issues as wide as education, health and safety, infrastructure and industrial diversification. This is why the general engineering services plus (GES plus) contracts Aramco is about to sign with seven engineering contractors must be giving them a lot to think about.
The GES plus contracts are designed to maximise in-kingdom involvement in the engineering and design of Aramco’s major process plant projects. Contractors who sign the GES plus contract have to guarantee to do the majority of design work in-kingdom to ensure that local engineers are gaining experience on Aramco’s mega-project programme.
But each contract guarantees 1 million man hours, so if all seven sign then you are looking at a huge amount of design work that the kingdom will not be able to cope with. The result will be that contractors will have to bring in hundreds of designers from offices elsewhere.
A more effective solution would be a mix of both in-kingdom and out-of-kingdom work. The engineering companies involved should be made to send Saudi nationals on secondment to offices in Europe, Australia and the US, thus giving them excellent all-round experience.
The GES plus contract is aimed at increasing the skill sets of Saudi nationals and the most effective way of maximising their potential is the route Aramco should take.