Saudi Aramco Signs 59 Deals Worth $11B Under iktva Program. Global Oilfield Services Majors Among Suppliers

November 22, 2022

©Saudi Aramco (File image)
©Saudi Aramco (File image)

Saudi Arabian national oil company Saudi Aramco saod Tuedsay it had signed signed 59 corporate procurement agreements (CPAs) with 51 local and global manufacturers, including oilfield services majors Baker Hughes, Halliburton, SLB, and TechnipFMC.

Saudi Aramco said the deals had the potential to create 5,000 new jobs in the in Saudi Arabia over the next decade. 

"The agreements, valued at $11 billion, are expected to reinforce Aramco’s robust supply chain and result in the development of materials manufacturing facilities in the Kingdom," Saudi Aramco said .

The 59 CPAs cover multiple strategic commodities, such as drilling chemicals, wellheads, switchgears, vibration monitoring systems, pipes, compressors, structure steel, fittings and flanges, and air-cooled heat exchangers.

The CPAs fall under a strategic pillar of the Aramco in-Kingdom Total Value Add program (iktva), where they are used to establish long-term agreements and commitments with supplier partners.

Ahmad A. Al-Sa’adi, Aramco Senior Vice President of Technical Services, said: “Our significant investments in a network of accomplished local suppliers strengthens Aramco’s resilience, ensuring that we remain the world’s most reliable energy company.  We are also extensively building commercial ecosystems globally by partnering with some of the world’s top energy, logistics, and manufacturing companies.”

Mohammad A. Al-Shammary, Aramco Vice President of Procurement and Supply Chain Management, said: “The CPA holders will be our future strategic manufacturing partners for these commodities, and the agreements further broaden our localization infrastructure across the Aramco network.”

Under their CPA agreements, supplier partners agree to establish local facilities, transfer technology, perform local research and development, and develop the local workforce and supply chain, while gaining preferred status with Aramco, Aramco joint ventures, and affiliates.

Since the launch of the CPA pillar, Aramco has entered into over 100 CPAs.

"These strategic agreements have driven localization in critical commodities such as drill bits, downhole, valves, pressure vessels, and process automation systems. In addition, some CPA holders now export materials globally while providing Aramco with the capacity to embark on the most robust project portfolio in the company’s history," Saudi Aramco said.

 Aramco launched iktva in 2015 with the goal of establishing a world-class supply chain in Saudi Arabia.  

"Since inception, iktva has delivered in key focus areas including Saudi workforce development, research and development, supplier development, and exports," the company said.

According to Saudi Aramco, since its launch, the iktva program has contributed more than $130 billion to the Kingdom’s gross domestic product, while creating more than 100,000 supply chain jobs for Saudis. 



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