Aramco Signs Contractor Agreements
Saudi Aramco said it signed deals in Dhahran November 26 worth $27.5bn with some 30 contractors and suppliers in the upstream, chemicals, utilities and IT/cybersecurity sectors. Many of the ‘deals’ though are simply memos of understanding, or initial agreements giving contractors the right to bid without further pre-qualification.
Among beneficiaries listed by Aramco in the upstream sector are two consortia – Dutch firm Boskalis with UAE-based Lamprell, and Technip with Malaysia Marine & Heavy Engineering – plus Malaysia’s Sapura, Baker Hughes GE, Schlumberger, China’s Offshore Oil Engineering Co (part of Cnooc), TechnipFMC, Ensco and Weir. Power contractors include Siemens, ABB, PowerChina, and Schneider Electric.
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Illustrating this, Boskalis said its long-term agreement is part of Aramco’s offshore oil and gas investment program that could lead to investments exceeding $3bn/yr with a program duration of six years, with options by Saudi Aramco to extend for a further three plus three years: “Selected contractors like Boskalis have the right to bid for tenders put out by Saudi Aramco without further technical prequalification, considerably shortening the lead time through to award.”
The $27.5bn announcement, thin on concrete details, may be part of the Kingdom's attempt to show that business remains keen to engage despite diplomatic pressure on Riyadh and the postponement of the initial public offering in Saudi Aramco.
Few international firms such as Technip and Schlumberger issued related statements, but Baker Hughes GE (BHGE) said Nov.26 it signed a memo of understanding with Aramco that aims to develop a broader base of local suppliers in the Kingdom, in line with Saudi aims to achieve 70% local content, and create new jobs.
A year ago Aramco signed $4.5bn of contracts that were much more focused on its plans to produce an extra 1.3bn ft³/day of output from its Haradh and Hawiyah gas fields over the next 20 years; in September 2018, BHGE said it signed a $175mn contract to supply 27 gas compression trains that will boost gas production at Haradh and Hawiyah.