Saudi Aramco signs agreements worth $11bn with manufacturers

The move could create 5,000 jobs in Saudi Arabia over the next decade

The Kingdom Tower, operated by Kingdom Holding Co., left, stands alongside the King Fahd highway, illuminated by the light trails of passing traffic, in Riyadh, Saudi Arabia, on Saturday, Jan. 9, 2016. Saudi Arabian stocks led Gulf Arab markets lower after oil extended its slump from the lowest close since 2004. Photographer: Waseem Obaidi/Bloomberg
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Saudi Aramco has signed corporate procurement agreements worth $11 billion to boost Saudi Arabia’s manufacturing sector.

The world’s largest crude oil exporter signed CPAs with 51 local and global manufacturers and said the move could create 5,000 jobs in the kingdom in the next decade while supporting Aramco’s “robust” supply chain.

Baker Hughes, Cameron Al Rushaid, Halliburton, Schlumberger and TechnipFMC were among the companies that signed the CPAs. The agreements cover strategic commodities such as drilling chemicals, wellheads, switchgears and vibration monitoring systems.

“Our significant investments in a network of accomplished local suppliers strengthen Aramco’s resilience, ensuring that we remain the world’s most reliable energy company,” Ahmad Al Sa’adi, Aramco senior vice president of technical services, said in a statement on Tuesday.

“We are also extensively building commercial ecosystems globally by partnering with some of the world’s top energy, logistics, and manufacturing companies.”

The CPAs are a part of Saudi Arabia’s In-Kingdom Total Value Add programme, which 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.

IKTVA has contributed more than $130 billion to the kingdom’s gross domestic product while creating more than 100,000 supply chain jobs for Saudi nationals, Aramco said.

“The CPA holders will be our future strategic manufacturing partners for these commodities, and the agreements further broaden our localisation infrastructure across the Aramco network,” Mohammad Al Shammary, Aramco's vice president of procurement and supply chain management, said.

Gulf countries have been executing programmes to redirect more government spending domestically in a bid to shore up the local economy.

The UAE’s In-Country Value programme aims to boost the growth of domestic industries by redirecting half of government spending on procurements and tender contracts into the national economy by 2031.

Last year, the Emirates redirected more than Dh41.4 billion ($11.27 billion) of spend into the national economy.

Updated: November 22, 2022, 3:23 PM