Saudi Aramco inks deals with U.S. companies
- Business & Finance
Oil giant Saudi Aramco has signed memorandums of understanding (MOUs) with oilfield service provider Schlumberger and EPCI company McDermott during the first Saudi-U.S. CEO Forum in Riyadh.
The inaugural Saudi-U.S. CEO Forum, attended by the U.S. President Donald Trump and held over the weekend, brought together over 50 US companies, 40 Saudi businesses as well as nine companies from key international markets.
According to Reuters, Saudi Aramco signed $50 billion of agreements with U.S. firms and the deals involving all companies totaled over $200 billion.
The Middle East’s English language daily, Arab News, reported that the signed deals included, among others, GE ($15 billion), Jacobs ($250 million), Weatherford ($2 billion), Rowan Companies ($1.2 billion), Nabors ($1.6 billion), Honeywell ($3.6 billion), McDermott ($2.8 billion), and Schlumberger for an undisclosed amount.
Most of the deals revolved around the In-Kingdom Total Value Add program (IKTVA) aimed to double the percentage of locally-produced energy-related goods and services to 70 percent by 2021 as well as generate 500,000 direct and indirect jobs for Saudis. It is a key part of the kingdom’s Vision 2030 as it attempts to reduce its reliance on oil exports.
McDermott signed a memorandum of understanding (MoU) with Saudi Aramco to expand and develop the company’s physical and human capital within Saudi Arabia supporting Aramco’s IKTVA initiative.
According to McDermott, the company plans to increase the number of Saudi nationals in its Middle East workforce to 40 percent by 2030.
David Dickson, President and CEO of McDermott, said: “As part of our global strategy to enhance our capabilities and deepen customer relationships, this MOU strengthens our long-term plans to transition our Middle East operations to Saudi Arabia, which we believe positions us competitively in the regional market.”
The deal is a part of McDermott’s nine-initiative plan which expands the company’s local supply chain, develops full-scale fabrication and marine facilities, moves area operations to Saudi Arabia, and provides career training and development opportunities for Saudi nationals.
Linh Austin, McDermott’s VP for the Middle East and Caspian, said: “This also builds on our recent efforts to increase Saudi Arabian-based fabrication and engineering through the opening of our new yard in Dammam and office in Al Khobar, as well as locally-sourced procurement.”
McDermott believes the $2.8 billion MoU will create up to 2,000 jobs over the next several years.
Another IKTVA-related deal Saudi Aramco signed on the same day as the one with McDermott was with Schlumberger.
Schlumberger said that the deal strengthens the deployment of its technology, reduces regional delivery times for key products and services, and increases local capacity and deployment capabilities.
Paal Kibsgaard, chairman and CEO of Schlumberger, said: “For more than 75 years, Schlumberger has supported Saudi Aramco and the Kingdom of Saudi Arabia’s oil and gas industry through an unwavering commitment to train and develop Saudi talent, and through a comprehensive portfolio of technologies, execution of integrated projects, and world-class research collaboration.”
Offshore Energy Today Staff