Saudi Aramco signed partnership agreements worth more than $21 billion (Dh77.1bn) with international companies to work across its value chain in the energy sector, including a $110 million joint venture with Baker Hughes in the non-metallics sector.
The world's largest oil-exporting country signed 66 preliminary agreements with companies from 11 countries at a forum focused on developing the kingdom's manufacturing capabilities with its partner companies.
The Saudi oil company will establish a 50:50 venture with the US oil services company to develop and manufacture composite materials for oil and gas as well as non-hydrocarbons-related activities.
The partnership will look at manufacturing products such as thermoplastic pipes and will be located in the King Salman Energy Park. The products will be intended for export in the Mena region, the companies said.
Aramco is diversifying into sectors besides oil and gas production to help boost income as well as localise production in Saudi Arabia.
It has previously expressed ambitions to become a market leader in the non-metallic materials sector.
The venture would support research and development as well as lower carbon intensity applications, Aramco said.
The In-Kingdom Value Add (IKTVA), which refers to the local manufacturing component required by Aramco from its partners rose to 56 per cent in 2019, compared with 35 per cent in 2015.
“Through effective governance, IKTVA has created infrastructure, streamlined processes, and built capabilities that improve return on investment and leverage greater value for our company,” said Saudi Aramco chief executive Amin Nasser.
The company is planning to increase the amount it procures locally, aiming to meet at least 70 per cent of procurement spending from Saudi companies by 2021.
At the event in Dhahran, Aramco signed agreements with Hyundai Heavy Industry, Siemens, Aasia Steel, Oilfields Supply Cente, Al Khorayef Petroleum, Mitsubishi Hitachi Power Systems, Schneider Electric, Honeywell, Advanced Electronic Company, XDM 3D Printing, Shengong New Materials, XINFOO as well as the Saudi Exports Development Authority.
From its inception, the IKTVA programme has attracted $6.5bn in investments across 44 industrial facilities, helping integrate Saudi supply chains, Aramco said.
