Page 4 - MEOG Week 47 2022

MEOG COMMENTARY MEOG

Aramco signs manufacturing

deals to bolster supply chain

The Saudi giant has agreed deals as part of its broad
efforts to build out the Kingdom’s services industry

SAUDI ARABIA MAJORITY state-owned Saudi Aramco this said: “The CPA holders will be our future strate-
week signed 59 corporate procurement agree- gic manufacturing partners for these commod-
ments (CPAs) for services that will be rendered ities, and the agreements further broaden our
WHAT: through the local offices of international oilfield localisation infrastructure across the Aramco
Aramco sealed 59 players. network.”
deals to improve the These agreements fall under the in-kingdom Having now agreed more than 100 CPAs,
localisation of its supply total value add (iktva) programme, which has Aramco is seeking to lay out a framework for the
chain. seen many of Aramco’s top suppliers ramp up further buildout of the Saudi supply chain across
their localisation efforts and others under pres- oil and gas as well as other forms of energy. The
WHY: sure from Riyadh to relocate their regional HQs deals provide for the partner firms to establish
The agreements to Saudi Arabia. local facilities, transfer technology, perform local
support the expansion research and development, and develop the local
of Aramco’s iktva Supplier deals workforce and supply chain. In exchange, they
programme, which This week’s deals, covering drilling chemicals, receive ‘preferred status’ in bidding for work with
ensures in-kingdom wellheads, switchgears, vibration monitoring Aramco, its joint ventures and affiliates.
manufacturing and jobs systems, pipes, compressors, structure steel, fit-
for Saudis. tings and flanges, and air-cooled heat exchang- Oilfield services
ers, were signed with the local subsidiaries of In October, the Saudi-based Arabian Rig Man-
WHAT NEXT: firms including Baker Hughes, Cameron, Hal- ufacturing (ARM) company was inaugurated in
With just over a year for liburton, SLB and TechnipFMC. the Kingdom’s Eastern Province, more than four
companies to relocate They will be used to establish long-term years after it was incorporated and a year after it
their regional HQs to agreements and commitments with supplier delivered its first rig.
Saudi if they wish to partners, according to Aramco. The company, a 70:30 JV between US-based
compete for government The company’s SVP for Technical Services, NOV and Aramco, will be headquartered at a
contracts, more Ahmad al-Sa’adi, said: “We are also extensively new facility dedicated to the localisation of rig
agreements are likely to building commercial ecosystems globally by manufacturing as part of the Kingdom’s Vision
be forthcoming. partnering with some of the world’s top energy, 2030 and iktva.
logistics and manufacturing companies.” Mean- The 500,000-square metre unit is located
while, VP of Procurement and Supply Chain within the King Salman Global Maritime Indus-
Management Mohammad A. al-Shammary tries Complex at Ras Al Khair, around 80 km

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