Saudi Aramco signs 59 deals worth US$11 billion
28/02/2023
Saudi Aramco has signed 59 corporate procurement agreements (CPAs) worth a potential total of US$11 billion (approximately £8.9 billion), with up to 51 domestic and international manufacturers, as a part of its coveted in-kingdom total value add (IKTVA) localisation programme.
IKTVA is at the heart of Aramco’s long-term local content strategy and plays a crucial role for domestic contractors, while also awarding large-scale deals to its pool of long-term agreement (LTA) contractors.
Aramco indicated that the agreements “are expected to reinforce Aramco’s robust supply chain and result in the development of materials manufacturing facilities in the kingdom”.
“The 59 CPAs cover multiple strategic commodities, such as drilling chemicals, wellheads, switchgear, vibration monitoring systems, pipes, compressors, structure steel, fittings and flanges and air-cooled heat exchangers,” a spokesperson from Aramco said.
Some leading international players that are part of the new agreement include Baker Hughes, Cameron Al Rushaid, Halliburton, Schlumberger and TechnipFMC.
“The CPAs fall under a strategic pillar of the Aramco IKTVA programme, wherein they are used to establish long-term agreements and commitments with supplier partners,” the company noted.
The Saudi company added that, under its CPA agreements, supplier partners agree to establish local facilities, transfer technology and perform local research and development, while gaining preferred status with Aramco and its affiliates.
Since the launch of the CPA pillar, Aramco has entered into over 100 CPAs.
Ahmad A Al Sa’adi, Senior Vice President of Technical Services at Aramco, said the company is: “extensively building commercial ecosystems globally by partnering with some of the world’s top energy, logistics and manufacturing companies.”
Aramco is scaling up investments and spending billions of dollars in ramping up its oil production capacity to 13 million barrels per day by 2027, up from the existing 12 million capacity.
The state-owned giant is carrying out tenders for multiple LTA contracts, focusing on some of the largest offshore fields in the kingdom.
