Arabtec subsidiary wins 200m-riyal Saudi Aramco contract

Target Engineering will replace storage tanks at the oil company’s Ras Tanura refinery

Arabtec said it is seeking an adviser to assist in debt restructuring after reporting a loss in thr first-half. Silvia Razgova / The National

Target Engineering Construction Company, a wholly owned subsidiary of Arabtec Holding, won a 200 million Saudi riyal (Dh196m) contract for the replacement of storage tanks at Saudi Aramco's Ras Tanura refinery in Saudi Arabia.

“We are delighted to be continuing to build our relationship with Saudi Aramco in the kingdom of Saudi Arabia," Wail Farsakh, Arabtec’s group chief executive, said in a statement to the Dubai Financial Market, where the company's shares trade.

"In line with our strategy, this important award further builds the group’s presence in the oil and gas sector.”

Target Engineering will replace three naphtha storage tanks and two slop oil storage tanks at the refinery that is in the eastern province of the kingdom, its parent company said.

Arabtec is the UAE’s largest-listed contracting company and has a workforce of more than 45,000.

Last year, it swung to its first full-year loss since 2016, mainly on weaker income from its construction business as liquidity for projects remained tight.

The company reported a net loss to shareholders of Dh774.5m, compared to a profit of Dh256.3m in 2018, as revenue decline by 21 per cent to Dh7.78 billion.

A slowdown in the property sector resulted in fewer construction contracts being awarded. However, Arabtec’s industrial, infrastructure and mechanical as well as electrical and plumbing business lines remained profitable last year.

Last month, Target Engineering won a contract worth Dh84m from Adnoc Offshore, an offshore arm of the Abu Dhabi National Oil Company.

It also won a Dh280m contract for the expansion and upgrade of a water disposal plant in Saudi Arabia last year. Aramco, the world’s largest oil-exporting company, is reorganising its downstream business, which includes refining and petrochemicals, to improve efficiency.

The downstream business will operate through four units – fuels, chemicals, power and a pipelines, distribution and terminals division, the company said earlier this month.