Saudi Aramco signed 50 preliminary agreements with local and international companies to redirect spending into the local economy in a bid to further support it.
The world’s largest oil-exporting company signed accords with companies including Schlumberger, Larsen and Toubro and Sutherland Global Services at the In-Kingdom Total Value Add (IKTVA) Forum and Exhibition, it said on Monday.
The IKTVA initiative refers to the local manufacturing component required by Aramco from its partners.
Saudi Arabia aims to drive domestic value creation, maximise long-term economic growth and diversification, and build a world-class supply chain for the development of a globally competitive energy sector in the kingdom through Aramco's IKTVA programme.
“It was not possible to foresee the consequences of the Covid-19 pandemic but IKTVA helped us to prepare for the disruptions it caused to the global supply chain,” Aramco president and chief executive Amin Nasser said.
“Our investment in a diversified network of suppliers has helped us maintain a track record of reliability and IKTVA continues to prove its value by contributing to an increasingly vibrant, dynamic and business-friendly environment in Saudi Arabia.”
The programme has helped to establish a competitive industrial base, resulting in exports to more than 40 countries, while local content requirements have contributed more than $100 billion to the national economy, according to the company.
At the same time, IKTVA has attracted more than 540 investments to the kingdom from 35 countries.
Aramco also signed agreements with Tanajib Cogeneration Power Company, Honeywell and Alfanar during the forum, which is taking place in Dhahran and will end on January 26.
The state-owned oil company's IKTVA from its partners rose to 56 per cent in 2019, compared with 35 per cent in 2015. In 2020, it signed partnership agreements worth more than $21bn with international companies to work across its value chain in the energy sector.
Gulf countries have been executing programmes to redirect more government spending domestically in a bid to shore up the local economy.
The UAE's national In-Country Value (ICV) programme is expected to increase domestic demand for local products and services to Dh55bn, from Dh33bn currently.
It aims to encourage local manufacturers to diversify and develop their production to meet that demand.