Page 5 - MEOG Week 47 2022

MEOG COMMENTARY MEOG

up the coast from the downstream hub of Jubail iktva forum
and 210 km north-west of Aramco’s head office In January, Aramco held its 6th iktva Forum in
in Dhahran. Dhahran, during which 50 CPAs were signed.
Speaking during the inauguration, Aramco Around a year earlier, Riyadh announced that
president and CEO Amin Nasser reiterated the companies must relocate their regional head-
earlier expectation that the facility would manu- quarters to Saudi Arabia by January 1, 2024 if
facture a minimum of 10 rigs per year. they want to continue having access to govern-
“Drilling rigs are one of the most important ment contracts.
symbols of the oil and gas industry and one of An official source told the Saudi Press Agency
the main equipment used in global energy sup- at the time that once the policy is implemented,
plies, and now Saudi Arabia has become a site the government will cease contracting with com-
for designing and manufacturing highly efficient panies primarily based elsewhere in the region,
and technical onshore drilling rigs,” he added. with the legislation applying to those working
Under a 2018 agreement, ARM delivered with Saudi agencies, institutions and govern-
its first rig to Aramco Nabors Drilling Co. ment-owned funds.
(SANAD) – a 50:50 JV between Aramco and With many energy companies having built a
Nabors which has committed to buying multiple Gulf base in the UAE, the move will represent a
units – in March 2021. The first rig was deployed clear challenge to the Emirates’ domination of
at the Manifa oilfield in early July, according foreign direct investment (FDI) as the Kingdom
to an internal Aramco newsletter provided to seeks to knock it from the top spot.
NewsBase. The drive comes as Riyadh pushes to create
At the time, Aramco SVP of Upstream Nasir jobs and turn the capital into one of the world’s
K. al-Naimi said: “Today, we are witnessing top 10 city economies and Aramco continues to
the first in-kingdom manufactured rig directly prioritise local content through various signifi-
working to serve our fields.” cant initiatives, of which iktva is the most impor-
Meanwhile, Aramco VP for Drilling and tant, and forms a major part of its commitment
Workover and ARM chairman AbdulHameed to Saudi Vision 2030. An iktva key performance
A. al-Rushaid said: “This represents just one of indicator (KPI) is included in the performance
a total 50 committed onshore rig purchases to matrices of each of the company’s divisions and
date and reflects our ambition to cement Saudi departments.
Arabia’s worldwide reputation as a pre-eminent According to an Aramco press release, as “a
builder of drilling rigs.” In 2018, Aramco said it result of iktva, 59% of Aramco’s spending in 2021
expected ARM to have manufactured 55 land was directed to domestic suppliers, up from 35%
rigs by 2025. in 2015 when the programme was launched”.
The wider King Salman complex will also Since then, iktva has contributed more than
include the International Maritime Industries $130bn to Saudi GDP while creating more than
(IMI) maritime yard JV between Aramco, 100,000 jobs in the supply chain for Saudis. As
Bahri, UAE-based Lamprell and Korea’s Hyun- has become evident through this and the push
dai Heavy Industries (HHI), as well as units to convince major consulting groups to move to
for jack-ups, casting and forging, and engine the Kingdom, the benefits of supporting such
manufacturing. developments are highly attractive.™

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