DAMMAM, Saudi Arabia Dec 14 State oil giant
Saudi Aramco signed deals with several foreign companies as part
of a drive to expand the kingdom's industrial base and
manufacture a bigger share of products domestically.
Deals include setting up joint ventures with U.S.-listed
firms Rowan Companies and Nabors Industries to
own, manage, and operate drilling rigs in Saudi Arabia.
Aramco also signed agreements in local manufacturing
development with Jubail Energy Services Company (JESCO) and
ArcelorMittal in Jubail on the Gulf coast for tubes used in oil
and gas production.
It signed another agreement with J-Power Systems Corporation
Japan for submarine electrical cables.
The agreements were signed on Wednesday on the sidelines of
Aramco's The In-Kingdom Total Value Add Program (IKTVA). No
financial details were disclosed.
Last year, Aramco said it aims through IKTVA to double the
percentage of locally-produced energy-related goods and services
to 70 percent by 2021 and to export 30 percent of the total
domestic energy goods and services produced in the Kingdom over
the same time frame.
IKTVA, Arabic for self-sufficiency, will help generate
500,000 direct and indirect jobs for Saudis, a key part of Saudi
Arabia's Vision 2030, an economic reform programme the
government announced this year, in which Aramco is to play a big
role in developing industrial projects as Saudi Arabia tries to
diversify its economy beyond reliance on oil exports.
Aramco outlined plans last year when it launched IKTVA to
spend $300 billion on its supply chain in the next 10 years to
boost local manufacturing.
"Our local manufacturing share has reached 10 billion
riyals, or 43 percent, which is an increase of 16 percent from
2015, and represents the highest level of local content in the
company's history," Saudi Aramco's CEO Amin Nasser told a
Nasser told Reuters companies had to change business plans
to accommodate changes in doing business with the oil giant by
manufacturing more in the kingdom, the world's largest oil
"They need to invest more and we understand it needs to be a
win-win. We would like them also to see what issues they might
have in terms of investments and how we can help them make it
viable to bring more investments here," he said.
The local sourcing target comes at a time of significant
financial stress in Saudi Arabia, as the Gulf's largest economy
has had to adjust to lower oil prices and reduced state spending
and economic growth.
(Reporting by Reem Shamseddine; Editing by Adrian Croft)