State oil firms step in to help

27 September 2011

A strong track record means state oil firms will increasingly be used by regional governments to deliver key infrastructure projects

As Saudi Arabia undertakes a development programme of unprecedented size, it is turning to its state oil company, Aramco, to undertake a number of important civil construction projects.

The national oil company is managing the construction of universities, research centres and even sports stadiums for the state. Aramco has a proven track record in delivering a variety of construction and engineering projects on time and on budget.

With the vast level of investment projects planned in the kingdom, Riyadh knows it can trust Aramco to deliver what is required when many of the other government departments are overstretched.

The oil major has been appointed for high-profile projects such as the King Abdullah Sports Stadium and the King Abdulaziz Centre for Knowledge and Culture.

It is not just Saudi Arabia that is expanding the role of its oil companies in its development plans. As the region continues to experience rapid population growth, the participation of oil companies in the Gulf’s civil construction sector is expected to increase.

Qatar Petroleum has formed a special projects arm for developing civil construction schemes, and with more than $60bn-worth of projects planned in the run up to the 2022 World Cup, its role will become increasingly important.

The growing role of oil majors in the construction sector will please contractors, as the firms are generally regarded as fair clients and good paymasters. But it will also present them with some initial challenges.

Contractors will have to ensure that they build good relationships with the oil companies and that they are able meet the requirements and standards set by the client. This will be essential if they are to successfully win work with the oil majors.

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