At an event in Dammam in December to promote and work towards achieving the objectives outlined in Saudi Arabia’s In-Kingdom Total Value Add (IKTVA) programme, Saudi Aramco signed agreements with local and foreign firms worth a reported total of $10.4bn, out of the 140 investment opportunities worth $16bn on offer.

The bulk of the deals signed focused on boosting the sourcing of local content and making arrangements for local manufacturing of products and services for the Saudi oil and gas industry. This has obvious socio-economic benefits.

The IKTVA scheme aims to export 30 per cent of its local manufacturing output by 2021, and, over the long-term, generate 500,000 direct and indirect jobs for Saudi nationals. To put this into perspective, the average annual spend on running oil and gas operations by Aramco over the past five years has been about $23bn. Assuming average spend remains the same, a 70 per cent target would crudely translate into a $16bn domestic industry for the kingdom.

In 2016, Saudi Energy Minister Khalid al-Falih said the localisation of the Saudi economy had reached 35 per cent in 2015, and was expected to reach 50 per cent by 2021, and eventually 70 per cent by 2030. At Aramco, the share of local manufacturers in 2016 had reached a company record of $2.6bn, or 43 per cent of total spend, a 16 per cent increase on the year before.

The IKTVA is therefore helping create a level playing field when competing with foreign firms, and reducing dependence on foreign products.