Page 4 - MEOG Week 47

MEOG COMMENTARY MEOG

Aramco opens new LTA

pool for brownfield work

The Saudi giant has added a new list of trusted contractors for work on
brownfield assets as it remains hesitant to proceed with major expansion work.

SAUDI ARABIA STATE-OWNED Saudi Aramco last week London-listed TechnipFMC.
announced the launch of a new contractor Emphasising the iktva focus, each of the
pool that will focus exclusively on oil and gas foreign companies signed agreements through
WHAT: brownfield and plant upgrade projects. The their local subsidiaries, which has become a pre-
The new pool announcement adds another pool of compa- cursor for winning contracts with Aramco as the
complements the group nies to Aramco’s list of prequalified signatories company seeking to incrementally improve the
of companies already of so-called long-term agreements (LTAs) with percentage of in-kingdom content each year.
signed up to carry out the state firm. The brownfield LTAs complement the
major offshore work. It comes as the company has slowed down pre-existing pool for the “general bid slate”,
contracting on expansion projects and indicates which grants automatic and exclusive prequal-
WHY: that Aramco’s focus is likely to turn to the rede- ification for the majority of offshore engineer-
Aramco is keen to make velopment and improvement of existing facilities ing, procurement, construction and installation
Saudi Arabia a major hub and operations. (EPCI) work.
for oilfield services and The latter pool comprises: Italy’s Saipem;
is developing two key New pool McDermott of the US; a consortium of India’s
complexes to facilitate Unsurprisingly given the kingdom’s local con- L&T and UK-based Subsea 7; US firm Dynamic
collaboration and tent drive, the eight signatories of the brownfield Industries; a consortium of UAE-based Lamprell
innovation. LTAs included greater Saudi influence, with and Dutch company Royal Boskalis Westmin-
Aramco’s press release noting that the contracts ster; the UAE’s National Petroleum Construc-
WHAT NEXT: had “a special emphasis on improving Saudisa- tion Co. (NPCC); Sapura Energy of Malaysia;
The company is unlikely tion, local content and supply chains through a consortium of TechnipFMC and Malaysia’s
to proceed with major Aramco’s In-Kingdom Total Value Add (iktva)” MMHE; China Offshore Oil Engineering Co.
oilfield expansion as programme. and South Korea’s Hyundai Heavy Industries.
it recovers from the The signatories are: a consortium of the Hyundai, Saipem and TechnipFMC are rep-
COVID-19 pandemic, local Nasser Saeed Al-Hajri & Contracting with resented in both.
though smaller jobs and Korean firm Samsung EPC; fellow Korean firms With Aramco contracting for some of the
gas contracts appear to Daelim, GS Construction and Hyundai Engi- largest oilfield work in the world, the impetus
have been ring-fenced. neering & Construction; Egypt-based Engi- for EPC firms to be involved is clear. Meanwhile
neering for the Petroleum and Process Industries the client expects the LTAs to “improve cost effi-
(ENPPI); Italy’s Saipem; Japan’s JGC Corp. and ciency and the quality and safety of the projects”

P4 www. NEWSBASE .com Week 47 25•November•2020