RIYADH // The defence company Lockheed Martin will assemble 150 Black Hawk helicopters in Saudi Arabia in a US$6 billion deal, one of many major agreements inked on Saturday with leading US companies who are bringing their expertise to the kingdom to help it wean itself off oil.
GE also clinched $15bn worth of deals with Saudi Arabia as part of more than $350bn of defence and other agreements between the kingdom and the United States that will be signed during the US president Donald Trump’s visit to the kingdom, his first international trip since taking office. About $109bn of these agreements are in defence, said the US secretary of state, Rex Tillerson.
Raytheon, Dow Chemical, General Dynamics, Jacobs Engineering Group and McDermott were also among firms to sign agreements and memorandums of understanding as part of a high-level business delegation that is in the kingdom to ink megadeals that are mainly focused within Saudi Arabia.
The planned agreements are part of the kingdom’s 2030 Vision to diversify the economy away from oil by attracting investments to help to finance projects aimed at employing the country’s young workforce.
“A big percentage of these is in the kingdom [and] include the localisation of strategic industries that have a high value added, and technologies, and job opportunities,” said Khalid Al Falih, Saudi Arabia’s energy minister.
He was speaking at the first Saudi-US CEO Forum that coincides with Mr Trump’s visit.
The agreements cover various areas including defence, information technology and energy, such as power generation, renewables, refining, petrochemicals and new mining industries such as silicons, Mr Al Falih said.
The national energy company Saudi Aramco plans to sign contracts with US companies worth about $50bn, its chief executive said earlier. Aramco, the world’s biggest oil producing company, will ink the deals with 13 US chief executives of companies that include Jacobs.
“The memorandums of understanding with these CEOs are for projects that will be done in the kingdom,” said Mr Nasser. “Definitely, a lot of them will include trade on both sides.”
Lockheed will support the final assembly and completion of about 150 S-70 Black Hawk utility helicopters in the kingdom, creating some 450 jobs.
GE’s deals and MoUs will be across a slew of sectors such as power, health care, oil and gas and mining.
About $7bn of the deals include the procurement of GE technology and services.
Honeywell also signed an agreement with Aramco to help it reach its goals for the In-Kingdom Total Value Add (IKTVA) Programme, which aims to have 70 per cent localisation of the company’s spending on goods and services and to enable the export of 30 per cent of Saudi energy sector products. IKTVA, Arabic for self-sufficiency, will help to create 500,000 new jobs, a key feature of Vision 2030. “Vision 2030 is the umbrella for all initiatives in the Saudi kingdom,” Mr Al Falih said.
Saudi launched its Vision 2030 last year to wean itself off oil by increasing the contribution of the private sector to GDP to 65 per cent from 40 per cent.
The plan also includes increasing localisation of oil and gas sectors from 40 per cent to 75 per cent. More than 50 per cent of military spending is also envisaged to be sourced locally by 2030.
Jacobs also signed an agreement with Aramco to form a joint venture to develop a range of infrastructure projects in the kingdom and at a later stage in the wider Middle East and Africa, said the chairman and chief executive, Steve Demetriou.
“It will be everything from housing to highways, rail to aviation, entertainment cities, and infrastructure associated with those,” said Mr Demetriou.
McDermott, meanwhile, signed a $2.8bn MoU to deliver projects localising goods and services along Aramco’s supply chain, Reuters reported.
Saudi-US trade topped $35bn last year, but the two countries want to bolster their economic ties as part of creating new jobs for their citizens.
dalsaadi@thenational.ae
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