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Abu Dhabi, UAEFriday 14 December 2018

Aramco awards Baker Hughes contract for oil production boost

The contract will help reduce costs and time, the company said

The three-year contract will help the Saudi state-owned producer reduce time and costs at the project which will start this month. Courtesy Baker Hughes
The three-year contract will help the Saudi state-owned producer reduce time and costs at the project which will start this month. Courtesy Baker Hughes

Saudi Aramco, the world’s biggest oil producing company, awarded GE-owned oil services company Baker Hughes a contract to help boost oil production in new and existing conventional fields in the kingdom.

Aramco didn’t disclose the value of the three-year contract, which will help the Saudi state-owned producer reduce time and costs at the project that will start this month, the company said in a statement on Tuesday. The contact includes the option of two one-year extensions.

“The contract further reinforces our integration efforts across conventional fields in Saudi Arabia, helping maintain capacity and meet domestic and global demand,” said Mohammed Al Qahtani, senior vice president of upstream at Saudi Aramco.

Baker Hughes will invest as much as 1 billion Saudi riyals (Dh980 million) in Saudi Arabia’s oil and gas sector, the kingdom’s investment authority said in September. The company won an integrated services contract on the offshore Marjan field development from Aramco in September.

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The project announced on Tuesday is expected to create more than 200 new engineering, field services and project management jobs, and indirectly supports an additional 300 existing jobs, which are all part of Aramco’s In-Kingdom Total Value Add (IKTVA) initiative, which aims to localise industry in the kingdom.

Baker Hughes has over 1,350 Saudi suppliers in its supply chain and has helped create over 5,300 indirect jobs.

IKTVA, an Aramco programme launched in December 2015, requires all of its suppliers to aim to attain 70 per cent local production and export 30 per cent of locally manufactured energy goods and services output by 2021.

Aramco signed deals worth $27.5 billion (Dh101bn) with international and local firms, as it pushed for greater value generation in its local economy at a forum held in Dhahran last month.

Baker Hughes, Schlumberger, Honeywell, Siemens as well as the UAE’s National Petroleum Construction Company are among the 31 companies that signed preliminary agreements with the state producer.