Aramco signs purchase agreements worth US$6.93bn

AramcoCoreAreaAramco announced the IKTVA programme in 2015 in an effort to boost local industry. (Image source: Wikimedia Commons)Saudi Aramco has awarded purchase agreements worth about US$6.93bn to 16 Saudi pressure vessel makers as part of its efforts to boost the domestic private sector and create jobs

“These agreements, set for 10 years, will expand the local industry’s capability and provide high quality supply of materials and services to Saudi Aramco. IKTVA is a cornerstone of Saudi Aramco’s procurement process which will expedite localization, promote locally-based SMEs and help economic diversification in support of Saudi Vision 2030. SMEs are the engine of innovation for economic growth and development. They have the agility, the know-how, the market expertise, and the products the oil and gas industry requires. That is why Saudi Aramco recognizes the huge potential of SMEs and we believe the companies chosen under this agreement will step up to the challenge and meet the required expectations,” Abdulaziz Al Abdulkarim, Saudi Aramco, vice-president, procurement and supply chain management.

The efforts are a part of its “In-Kingdom Total Value Add” programme which was launched in December 2015 to encourage local industry and suppliers.

As part of the programme, Aramco aims to double the percentage of locally-produced energy-related goods and services to 70 per cent by 2021, helping the local energy goods and services industry to export 30 per cent of its output and create half a million jobs for locals.

Saudi Arabia’s economy has come under pressure since 2014 due to a glut in oil supply, which forced oil prices to multi-year lows.

The slump in prices hit the country’s revenues, which are highly dependent on the price of oil.

Since then, Saudi Arabia has sought to cut spending, diversify its economy, create jobs, ease regulation and encourage private sector growth.

As part of these efforts, the government has announced mega infrastructure projects to position itself as an investment hub, even as it seeks to publicly list a part of Aramco.

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