Page 5 - MEOG Week 04 2022

MEOG COMMENTARY MEOG

investment in a diversified network of suppliers shipbuilding with partners including Hyundai,
has helped us maintain a track record of relia- Lamprell, McDermott and the national shipping
bility, despite the ongoing impact of COVID-19 firm Bahri.
on global supply chains. The iktva programme Following this week’s update, Honeywell
continues to prove its value by contributing announced that it had launched a new facility
to an increasingly vibrant, dynamic and busi- in Jubail to produce skids and stations solutions,
ness-friendly environment in Saudi Arabia.” along with automation and control systems to
In a press release, Aramco said that as “a result support Aramco.
of iktva, 59% of Aramco’s spending in 2021 was
directed to domestic suppliers, up from 35% in Output uptick
2015 when the programme was launched”. These contracts and facilities are geared towards
It added that during this year’s forum it aiding Aramco in its push to expanding oil pro-
signed 50 memoranda of understanding (MoUs) duction while reducing to zero its scope 1 and
for collaborative localisation efforts across areas scope 2 greenhouse gas (GHG) emissions across
including climate leadership, wellhead procure- its wholly owned operated assets by 2050.
ment, vessel fabrication, cogeneration, desalina- The company has a maximum sustainable
tion and carbon fibre investment. capacity (MSC) of 12mn bpd of oil production,
These preliminary deals were agreed with but while output sits at 10mn bpd and has only
a wide array of local and international energy twice breached the 11.1mn bpd mark, it is ramp-
and technology services companies, including ing up efforts to increase this to 13mn bpd by
Baker Hughes, Halliburton and Schlumberger, 2027. Meanwhile, efforts are ongoing across its
which were also given awards for previous iktva slate of so-called crude increment projects to
performance. offset decline from mature assets under a pro-
gramme designed to make another 1.5mn bpd
Hubs available by that same date.
An important sign of the iktva’s programme’s These expansions are key to Aramco adding
progress is the development of two major oilfield to its spare capacity, which offers flexibility in
and energy services hubs in the Eastern Province support of Saudi’s role as OPEC kingpin. With
– King Salman Energy Park (SPARK) and King this in mind, Nasser told reporters gathered at
Salman Global Maritime Industries Complex at the iktva Forum that oil demand is closing in
Ras Al Khair – to house new facilities that will on pre-pandemic levels and reiterated previous
support the energy sector. warnings about producers not investing enough
SPARK is pegged as an “energy city megapro- in supply.
ject which will position Saudi Arabia as a global “We are getting very close to pre-pandemic
energy, industrial and technology hub”, with the levels. We continue to see healthy demand in the
first phase of development planned for next year future,” he said, with figures from the Interna-
with 15 companies having signed deals to invest. tional Energy Agency (IEA) showing a global
In October Baker Hughes broke ground on its consumption figure of around 98mn bpd as
new regional oilfield services centre at SPARK, demand closes in on the 100mn bpd level of
located just to the east of Abqaiq, which is home early 2020.
to an oil and natural gas liquids (NGLs) plant Aramco stands to benefit more than most
which handles up to 7mn barrels per day (bpd). from the rise of oil prices which, amid geopolit-
Meanwhile, Ras Al Khair, up the coast ical concerns around the Middle East and East-
from Aramco’s major downstream hubs at Ras ern Europe, show little sign of retreating from
Tanura and Jubail, will include units for rig and around $85 per barrel.™

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